Shares of Block (NYSE:SQ) fell today, which may be attributed to an analyst downgrade. Indeed, Steven Kwok of KBW changed his rating on the stock from Buy to Hold while assigning a price target of $75 per share. For reference, his previous price target was $90 per share.
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Kwok is worried about multiple things when it comes to Block. To begin with, there is the “potential for regulatory scrutiny within its Cash App segment.” Such a scenario would impact growth and profitability by raising costs.
In addition, its income streams are “increasingly being viewed as not-so rock solid.” This includes instant deposit fees, unregulated interchange, and buy now pay later lending.
Overall, Wall Street analysts have a consensus price target of $96.36 on SQ stock, implying 47% upside potential, as indicated by the graphic above.