Action leading Ibovespa highs in 2022 have more to offer? Santander believes so

In their best version, the acquiring companiesespecially the sky 🇧🇷CIEL3), can deliver more next year, evaluates the Santander🇧🇷

In a report published last week, the 25th, analysts at the bank raised the company’s share price target from R$6 to R$7.50 at the end of 2023. This implies an appreciation potential of approximately 60% compared to at current prices.

It is worth remembering that Cielo easily leads the valuations of the Ibovespa in the year. In accumulated terms, the role of the payment machine company jumps by more than 100%.

The optimism in relation to the acquiring sector is based on a scenario of Selic still high in 2023. In Santander’s assessment, bank acquirers, such as Cielo, Network and GetNetare enjoying a competitive advantage over new entrants (stone and PagSegurofor example) due to the greater availability and lower cost of funding sources.

“This proved crucial in a high Selic environment, because bank acquirers were able to pass on higher Selic costs without churn considerable,” he explains. With this, the institution reinforces the buy recommendation for CIEL3.

2023 still positive

Santander believes that the scenario for Cielo will be more challenging in 2023, but still positive. Bank analysts estimate TPV (total volume of payments) to be lower next year compared to 2022, but the competitive advantage of bank acquirers within an environment of high Selic can provide support to the company.

Santander increased Cielo’s adjusted net profit estimates for 2023, to R$ 1.9 billion.

For 2024, the bank assesses greater risks to the company, such as competition, which may strengthen in a one-digit Selic environment.

“If/when that happens, the volumes of Cateno can be a positive surprise”, he adds.