Optimistic Outlook on Block’s Growth Potential Driven by Cash App’s Credit Expansion and Attractive Valuation

James Faucette, an analyst from Morgan Stanley, maintained the Buy rating on Block (XYZ – Research Report). The associated price target remains the same with $65.00.

James Faucette has given his Buy rating due to a combination of factors, primarily focusing on Block’s Cash App and its potential for credit expansion. He highlights the effectiveness of Cash App’s underwriting model, which uses real-time financial data to assess risk more accurately than traditional models. This approach has resulted in low loss rates for products like Borrow and Afterpay, making it a promising avenue for growth.
Additionally, Faucette points to the attractive valuation of Block and a more positive outlook on Square Seller’s growth potential. The optimism is further supported by low investor expectations and strong survey data from small and medium-sized businesses. Overall, these elements contribute to a favorable view of Block’s ability to expand its credit offerings and improve its financial performance.

Faucette covers the Technology sector, focusing on stocks such as Endava, Block, and Fiserv. According to TipRanks, Faucette has an average return of 4.9% and a 63.69% success rate on recommended stocks.

In another report released on May 19, Wolfe Research also maintained a Buy rating on the stock with a $75.00 price target.