BMO Capital analyst James Fotheringham upgraded Block to Outperform from Market Perform with an unchanged price target of $159. Following a 70% de-rating of the shares over the past 12 months, the analyst expects Block will re-rate to a 60-times price-to-earnings ratio on 2023 estimates given its 32% organic revenue growth potential. He also expects Block will “surprise positively” on growth and earnings. Fotheringham’s model is more bullish than consensus due to out-year forecasts for a “softer landing” for Cash App and Afterpay accretion revenue growth and earnings. The analyst highlights the company’s investor day on May 18 as a potential positive catalyst.
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