Raymond James thinks that shares of Block should continue pushing higher in the new year. The investment firm upgraded the fintech stock to outperform from market perform. Analyst John Davis also set a new target price of $115, implying upside of 33% going forward. Davis shared that a deep dive in Block’s seller gross payment volumes left him with greater confidence in the stock’s 2025 acceleration story. “In our view, Seller GPV is the most important metric for the stock, and we believe growth can accelerate back into the double-digits in ’25 (from ~8% in ’24) given the combination of easing comps (SSS likely down LSD in ’24), new sales momentum driven by improving distribution, international expansion, and product innovation,” the analyst wrote. Given his confidence, Davis believes that Block’s 2025 estimates are in a good spot. Block’s valuation is also attractive despite the stock’s recent run. Shares of Block rose about 33% over the past three months, versus the equal-weighted S & P 500’s 2% decline in that time period. SQ 3M mountain SQ 3M chart “Simply put, we believe valuation is more than attractive at current levels, and management’s recent focus on driving higher quality AEBITDA/FCF should also help improve the multiple over time,” the analyst added. “That said, we acknowledge Cash App is a bit of a wild card given net new actives have been flat over the last two quarters, although we believe the emphasis on driving engagement within the existing customer base should insulate gross profit growth if lackluster user growth persists.” Shares rose more than 2% following the upgrade. Analysts are generally bullish on the stock. LSEG data shows that 36 of 48 of those covering Block rate it as a buy. The average price target also points to 14% upside.
Raymond James upgrades Block to outperform on renewed confidence in stock’s 2025 growth story