Here’s what Wall Street experts are saying about Block ahead of earnings

KeyBanc says data suggests Block is poised to deliver a roughly in-line to better-than-expected set of results

Block (SQ) is scheduled to report results of its fourth fiscal quarter after the market close on February 23, with a conference call scheduled for 5:00 pm EDT. What to watch for:

Click here to check out the recent Media Buzz Sentiment on Block as measured by TipRanks.

POSITIVE AHEAD OF EARNINGS: On Wednesday, KeyBanc raised the firm’s price target on Block to $100 from $90, keeping an Overweight rating on the shares ahead of quarterly results. The firm is positive headed into the print as Block remains a key idea for KeyBanc. At a high level, alternative data trends across its proprietary credit/debit card and app-based data sources across Square and Cash App look broadly consistent to slightly better than the firm’s model, which suggests Block is poised to deliver a roughly in-line to better-than-expected set of results.

KeyBanc also raised its 2023 gross profit estimate of $7.30B — above Street at $7.24B — built upon 29% Cash App gross profit growth and 21% Square GPV growth. Further, the firm models about 17% opex growth as it believes the "lean growth" mindset is likely to be fully incorporated in 2023 planning resulting in EBITDA of $1.35B equating to 34% incremental margins, similar to 2021 levels in the low-30s%.

Back in January, Baird had upgraded Block to Outperform from Neutral with a price target of $78, up from $62. Block is a "premier large-cap growth franchise with both profitability and net cash," the firm said at the time. Baird believes the company will benefit from macro trends such as rising interest rates and inflation, and thinks sentiment can improve as Block’s growth "should remain good in 2023 and margins ramp."

BELOW-STREET ESTIMATES: Late last month, Oppenheimer downgraded Block to Perform from Outperform, citing the share rally and the firm’s 2024 profit estimates being significantly below consensus. Block will be a first mover for a "risk on" trade, but financial technology stocks have not bottomed and the recent rally in the shares could "evaporate," the firm said. Oppenheimer’s below-Street estimates stem from a spending slowdown in seller combined with less Cash App monthly active adds then consensus as well as less spend per active.

Keywords: earnings watch, earnings, quarterly results, Block, Square, Cash App