Jack Dorsey’s Block Inc. (NYSE:SQ) has received a series of price target cuts from analysts owing to the growing concerns regarding the economic downturn. Block offers a multitude of services related to payment processing, cryptocurrency, music, and an easy-to-access Bitcoin (BTC-USD) mining and blockchain technology platform.
Recently, a series of Wall Street analysts have lowered the price targets for SQ stock as they are concerned about a potential worsening of the economic slowdown.
Here’s What Analysts Predict for Block
Ahead of Block’s Q3 print, Jefferies analyst Trevor Williams slashed the price target to $70 (26.9% upside potential) from $105 while maintaining a Buy rating.
Williams does not expect any major surprises in the third-quarter results. Also, he believes that the continuous underperformance of the stock is due to the expected deterioration of low-income consumers, small businesses, credit, and buy-now-pay-later businesses.
Similarly, Keefe Bruyette analyst Sanjay Sakhrani cut the price target on SQ to $78 (41.4% upside potential) from $100 and also maintained a Buy rating.
Sakhrani believes in the core fundamentals of the payments industry. Having said that, currency headwinds, and the bleak economic outlook stemming from persistent inflation and rising interest rates remain a drag on the overall sector’s trajectory.
Block is slated to release its third-quarter results on November 3, after the market closes. The Street expects Block to post an adjusted profit of $0.23 per share in Q3, meaningfully lower than the prior-year quarter’s figure of $0.37 per share. Meanwhile, revenue is pegged at $4.49 billion, representing a year-over-year jump of 16.9%, and in line with Q2FY22 revenue of $4.40 billion.
Is Block a Buy or Sell?
On TipRanks, Block stock has a Moderate Buy consensus rating. This is based on 21 Buys, five Holds, and one Sell. The average Block price target of $98.88 implies an impressive 79.2% upside potential to current levels. Meanwhile, SQ stock has lost 66.4%, year to date.
Parting Thoughts
Analysts have cut the price target on Block stock but remain optimistic about its future potential. Once the current headwinds are behind us, all of Block’s business segments will regain their lost share. Investors may want to await further clarification in Block’s third-quarter conference call before making investment decisions.
