BofA is latest to initiate on Brazilian digital bank PicPay at 'buy'

BofA Securities has initiated coverage of Brazilian fintech PicPay with a “buy” rating, less than a month after the company went public in an IPO, listing on the Nasdaq. The company’s earnings per share is expected to grow at an average annual rate of 117% through 2028, with the main driver being an expansion of PicPay's loan portfolio, BofA said.

BofA initiated coverage of PicPay at “buy,” CNBC reported. The target price is $27 per share, which implies roughly 61% upside versus the stock’s closing level on Tuesday. That day, the stock rose 7.70% to $16.81 per share.

The upside comes from projected growth in PicPay’s loan portfolio, Investing.com reported. The analysts expect lending to become the main driver of profitability, with earnings per share expected to increase at an average annual rate of 117% through 2028.

BofA Securities also expects PicPay’s return on equity to rise to 30% from about 16%, Investing.com writes. These dynamics are not reflected in the current share price, BofA argued.

PicPay started in 2012 as a payments platform. It is now one of the largest digital banks in Brazil. As of September 30, the company had 42 million active customers, according to Reuters. PicPay offers various financial products and services, including credit cards, insurance, "buy now, pay later" program.

A distinctive feature of PicPay is its ability to "merge social interaction with payments," Tech Funding News wrote last October. This “super app” approach allows users to send money, shop, and invest within a single ecosystem.

PicPay priced its IPO on Nasdaq in late January, offering investors nearly 22.9 million shares at $19 per share. The company raised about $435 million, excluding the underwriters’ option. Reuters described the offering as long awaited: the company had planned to go public in the U.S. as early as 2021, but abandoned the plan due to an unfavorable market.

PicPay’s offering was the first IPO by a Brazilian company in more than four years, according to Reuters. Besides being a source of capital, a U.S. listing allows the company to increase visibility among global investors seeking exposure to fintech markets in developing countries, Tech Funding News wrote.

PicPay has not yet reported results for 2025. In the first nine months of last year, the fintech reported "revenue and financial income" of BRL7.3 billion (about $1.37 billion) and net income of BRL313.8 million (about $59 million).

PicPay shares are now trading 11.5% below the IPO price. Meanwhile, Wall Street remains sanguine on the stock's prospects. PicPay has six analyst ratings, and all are “buy.” The average target price is $24.33 per share, implying roughly 45% upside from current levels.