Block price target lowered to $70 from $72 at Morgan Stanley

Morgan Stanley analyst James Faucette lowered the firm’s price target on Block to $70 from $72 and keeps an Equal Weight rating on the shares. The analyst says recent near-term controversies and detractions following the short report "are well understood." However, the firm reduced Cash App’s 2024 valuation multiple to reflect "modest incremental uncertainty" around regulation frameworks created by stresses in the broader banking system and recent Block-specific detractions related to its revenue streams. Nonetheless, Morgan Stanley believes Cash App has a "significant opportunity" to be a sizable financial institution focused on younger people and is likely the best long-term value creator for Block. Its survey work shows Cash App customers want a full suite of financial services. For example, 74% of those surveyed would use a checking account, 68% a credit card, and 67% a savings account, the analyst tells investors in a research note. The firm does not expect Cash App will generate "better-than-bank" margins.