© Reuters. Block (SQ) Falls as Evercore ISI Outlines 7 Reasons to Sell Stock
By Senad Karaahmetovic
Evercore ISI analysts added shares of Block (NYSE:) to the firm’s Tactical Underperform list. The analysts have an Underperform rating with a $49 per share price target on Block stock, signaling a nearly 20% downside from current levels.
Just a day before the company is due to release its earnings, the analysts highlighted 7 reasons why they believe Block stock is a sell.
Evercore is 4% below consensus on Gross Profit for 2023E;
Block may struggle to sustain the rapid pace of innovation;
Increasing competition is facing SQ Seller;
Stiffening competition within BNPL;
High interest rates challenge unit economics and mission of $29 billion Afterpay acquisition;
Increasing FX headwinds; and
No capital return either through share repurchase or dividends.
As far as estimates are concerned, the analysts see a downside of 4% and 10% to Consensus 2023 Gross Profit and Adjusted EBITDA, respectively.
Block stock price is down about 2% in pre-open Wednesday. Shares are trading about 65% lower year-to-end.