Block downgraded to Neutral from Buy at UBS

UBS analyst Rayna Kumar downgraded Block to Neutral from Buy with a price target of $65, down from $102. The company’s gross profit growth will likely slow given softening of consumer discretionary spending, a slowdown in Cash App monthly active user growth and moderation of Cash App monetization in the second half of 2023 and 2024, the analyst tells investors in a research note. While Block continues to make progress on profitability and repeatedly outperforms quarterly expectations on adjusted EBITDA, investors remain more focused on Block’s gross profit growth potential, says UBS. The firm sees limited share upside given “a lack of catalysts in sight” and says a re-acceleration of gross profit growth is unlikely.