Wells downgrades Block on ‘heavily back half weighted’ outlook

Wells Fargo downgraded Block (XYZ) to Equal Weight from Overweight with a price target of $50, down from $95, following the Q1 report. The combination of a “heavily back half weighted” guidance, growing credit contributions and numerous Cash App monetization “red flags make it too difficult to recommend shares at current levels,” the analyst tells investors in a research note. The firm says that while Block’s guidance assumes macro deterioration, management asserts this effect has not materialized to date, creating a messaging versus reality “mismatch.” In the current environment, Wells sees a “rougher road” for the company to meet 2026 consensus estimates. It finds Block’s risk/reward not compelling despite the earnings pullback today.