Block’s Stock Poised for Growth: Buy Rating with 29% Upside Potential

In a report released today, Adam Frisch from Evercore ISI maintained a Buy rating on Block, with a price target of $85.00.

Adam Frisch has given his Buy rating due to a combination of factors that highlight the potential upside for Block’s stock. The recent IPO of Chime has provided a more direct comparison for Cash App, revealing that the current valuation discount is excessive. Both Cash App and Square are poised for stable near-term results and medium-term growth, supported by improved execution. The current discount of approximately 50% is considered too steep, prompting a revised discount of 40% for Cash App and 30% for Square compared to their peer groups.
Frisch anticipates that Cash App will close the growth gap with its competitors by 2025 while maintaining favorable transaction profit margins. Similarly, Square is expected to grow slightly faster than its peers by 2026, aided by an enhanced product offering and a motivated sales team. Despite the potential for further discount reduction, Frisch believes the valuation disconnect is evident and the stock presents a favorable risk/reward scenario. The price target has been raised to $85, reflecting a 29% potential upside, and the stock remains attractively priced within its sector.

According to TipRanks, Frisch is a 3-star analyst with an average return of 38.4% and a 100.00% success rate. Frisch covers the Technology sector, focusing on stocks such as Block, Shift4 Payments, and Toast Inc.

In another report released yesterday, Robert W. Baird also maintained a Buy rating on the stock with a $76.00 price target.