Like brick, traditional, three-coat masonry stucco is considered a "reservoir cladding." It will adsorb moisture when it rains. Yes, it can reach a multi-layer felt (secondary) drainage plane. The purpose of the secondary drainage plane is to protect the sheathing against moisture migration.

Thanks Charles Ross Homes . I think what you mean by felt(secondary) drainage plane are the papers I described ? What is sheathing, the insulation materials between drywall and papers ?

If I understand your explanation correctly, I guess you mean the papers protect moisture from reaching beyond them which are the insulation materials. If so, when papers are put on, assuming more than one piece of paper is applied, are there any caulking or waterproofing applied on paper boundaries/overlaps ?

Two layers of paper are still used in the West. The outer layer of the two layers is expected to expand and warp thereby allowing water to drain to the bottom of the wall and escape if properly detailed. In the East synthetic materials are used like Tyvek StuccoWrap (same as Drainwrap) HydorGap, etc. Some use Tyvek or Typar covered with a cheap lumberyard brand of house wrap.

In common parlance, there are two different types of stucco:

1) Traditional three-coat stucco as described in first response. But applied to inappropriate building papers, i.e., plastic, there is no drainage layer, so there are moisture problems.

Hardcoat stucco failure.

2) EIFS (exterior insulation and finishing systems), often called stucco, as described above, are essentially a surface finish over polystyrene boards applied to the wall. Face-sealed systems are inherently defective and caused billions of dollars of damage in Vancouver and the Lower Mainland of British Columbia from the '80s to early 2000s. Drainable EIFS systems are considered robust. (Just don't try bouncing a basketball against them!)

EIFS failure. No drainage, poor detailing. Photo: Inernational Institute of Building Enclosure Consultants.