Jack Dorsey-led Block Inc. (NYSE:SQ) is scheduled to release its fourth-quarter results on Thursday after the market close.
The Block Analyst: KeyBanc Capital Markets analyst Josh Beck maintained an Overweight rating and raised the price target from $90 to $100, suggesting roughly 39% upside from current levels.
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The Block Thesis: “We are positive, headed into the print as SQ remains a key idea for us,” Beck said in a preview note.
Alternative data trends across the firm’s proprietary credit/debit card and app-based data sources across Square and Cash App look broadly consistent to slightly better than our model, the analyst said.
As such, the analyst said Block is poised to deliver a roughly in-line to a better-than-expected set of results. He raised the 2023 gross profit estimate for Block to $7.30 billion, ahead of the Street estimate of $7.24 billion.
The upward revision was premised on 29% Cash App gross profit growth, excluding Afterpay, which Block acquired in Jan. 2022, and Bitcoin (CRYPTO: BTC), and 21% Square gross payment volume growth, the analyst said. He also expects a moderation in operating income growth due to the “lean” growth mindset that will likely be incorporated in 2023 planning, leading to above-consensus EBITDA.
The price target hike reflected KeyBanc’s upwardly revised estimates, he added.
Price Action: Block closed Tuesday’s session down 4.09% at $71.95, according to Benzinga Pro data.
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