Block Inc.’s (SQ) shares are experiencing a surge on Thursday, riding the wave of positive sentiment generated by fellow Buy Now, Pay Later (BNPL) company Affirm Holdings, Inc. (AFRM). Affirm’s recent quarterly results have exceeded expectations, with revenue growth reaching almost 50% year-over-year. The company’s optimistic guidance for the first quarter further amplified the positive market reaction. This upbeat performance is likely lifting the spirits of the entire BNPL sector, including Block, which offers BNPL services through Afterpay, acquired in 2022.
UBS analyst Rayna Kumar maintains a Buy rating for Block, but has adjusted the price target from $100 to $92. This move suggests a cautious optimism, reflecting the analyst’s confidence in Block’s future performance while acknowledging potential challenges.
To assess the potential for further upside in Block’s stock, it’s helpful to consider the consensus view of Wall Street analysts. The average 12-month price target for Block is $87, with a high target of $100 and a low target of $55. Currently, 10 analysts hold positive ratings, one has a neutral rating, and one has a negative rating. This suggests a generally positive outlook for the company, although there are some dissenting voices.
It’s important to remember that stock prices can fluctuate, and the average stock market return is around 10% per year. Block’s year-to-date performance is down 5.82%, indicating some recent volatility. However, the average analyst price target suggests potential for upside in the future.
As of Thursday’s publication, Block shares are up 5.24% at $68.07. This positive momentum, fueled by the strong performance of its BNPL peer, suggests that Block is poised to benefit from the growing popularity and adoption of BNPL services.
