- Mizuho Analyst Dan Dolev downgraded Block, Inc Q to neutral from Buy with a price target of $57, down from $125.
- After years as Block’s most innovative name in payments, “user fatigue, stagnant inflows, loss of best-of-breed” point-of-sale status and “buy now, pay later” “misexecution” are blocking Block’s growth, remarked Dolev.
- Block “still has tremendous potential, but it’s not realizing.”
- Also read: Payment Firms Square, PayPal receive widely differing views in Wall Street eyes amid BNPL woes and hefty margins
- Instead, BNPL estimates continue to fall and projects like Bitcoin, which accounts for <5% of gross profit, appear to be disproportionately occupying management's attention.
- He believes block stocks no longer deserve a premium rating relative to the US payments sector.
- Recently Dolev Stock purchase recommended from Affirm Holdings, Inc AFRM on weakness following plans for a government crackdown on the BNPL sector.
- Dolev considered the Consumer Financial Protection Bureau’s report “less damaging than feared.”
- The “lack of a clear call to action is positive,” he noted.
- Price promotion: SQ shares traded 5.97% lower at $55.90 on the last check Thursday.
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