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Investing.com - Morgan Stanley (NYSE:MS) has raised its price target on Block Inc. (NYSE:XYZ) to $77.00 from $73.00 while maintaining an Equalweight rating on the stock. According to InvestingPro analysis, the stock appears undervalued at its current price of $76.85, with the company showing strong returns over recent months.
The firm adjusted its price target despite modestly lowering estimates for the company, citing lower share count and debt assumptions in its updated valuation model.
Morgan Stanley’s sum-of-the-parts valuation applies a multiple of approximately 2.5x to its 2026 Cash App gross profit forecast and an 11.5x EV/EBITDA multiple to its 2026 EBITDA estimate.
The firm noted that its Square multiple reflects a slight discount to peers on a growth-adjusted basis, attributing this to high discretionary small and medium business exposure in an uncertain macroeconomic environment and "still-to-be-proven competitive positioning."
For Cash App, Morgan Stanley is applying a multiple at a discount to consumer finance peers such as CHYM and AFRM, citing low-end consumer exposure, slower execution, and a more limited suite of banking services.
In other recent news, Block Inc. reported its second quarter 2025 earnings, which showed a mixed financial performance. The company missed analyst expectations with earnings per share of $0.62, falling short of the forecasted $0.67. Additionally, Block’s revenue came in at $6.05 billion, below the anticipated $6.27 billion. Despite these misses, Block’s stock saw a significant increase, attributed to strong operational updates and future growth prospects. Piper Sandler responded by raising its price target for Block from $50 to $58, although it maintained an Underweight rating on the stock. This adjustment followed Block’s updated fiscal year 2025 guidance. These developments highlight recent changes and expectations surrounding Block Inc.
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