The Intelligent Financial APP learned that Morgan Stanley released research reports and downgraded the ratings of Brazilian payment companies PagSeguro Digital (PAGS.US) and StoneCo (STNE.US) to 'shareholding'. Analyst Jorge Kuri expects that 2024 will mark the peak of growth and profitability for the Brazilian payment industry. As of Thursday's close, PagSeguro Digital and StoneCo fell more than 8% and 6% respectively.

In a report to clients, the analyst wrote that Morgan Stanley believes 'the market is missing out on the challenges brought by the market saturation'.

When predicting the future earnings per share of the two companies for the next six years, the analyst took into account factors such as the slowdown in the growth of payment volume, price compression, and declining operating leverage. Therefore, Kuri reduced the earnings per share of these two companies by 45%-55% in 2030.

Morgan Stanley's long-term expectations are currently 50%-60% lower than the market's general expectations.

In addition, the analyst stated that the downgrade to 'shareholding' 'not only reflects (Morgan Stanley's) concerns about the core payment business, but also reflects its belief that these companies will ultimately be unable to rapidly achieve diversification beyond the payment business'.