Mizuho says alcohol survey may be ‘bad omen’ for Block

Mizuho analyst Dan Dolev says his study of alcohol spend across 18 states shows early signs of consumers potentially trading down from higher-priced categories such as cognac or scotch, towards lower-priced categories such as vodka. “If true, it may signal emerging financial hardship amongst low-income consumers,” Dolev tells investors in a research note. Since about 80% of Cash App’s 47M users earn $85,000 or less, any adverse impact to the health of the low-income consumer “may have an outsized impact” to Block’s financials, writes the analsyt. He remains concerned and keeps a Neutral rating on the shares with a $57 price target.