Scotiabank Sees 50% Upside In This Fintech Company

Scotiabank analyst Jason Mollin initiated coverage of PagSeguro Digital Ltd PAGS with an Outperform rating and a $39 price target, implying a 50% upside.
Mollin rolled out coverage on a trio of Brazilian payments and fintech players, which he noted together represent about 50% of the Brazilian acquiring market's total payment volume or TPV.
Given PagSeguro's business mix with both acquiring and card issuance through PagBank, potential caps on prepaid cards that would hit interchange revenues would be offset by lower interchange fees/costs in the acquiring business, making concerns about a possible cap on the interchange for prepaid cards "overdone."
PagSeguro is his top pick among the three payment names just initiated, the analyst noted.
Price Action: PAGS shares traded higher by 4.95% at $26.06 on the last check Thursday.