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Investing.com - JPMorgan has raised its price target on Block Inc. (NYSE:XYZ) to $90.00 from $60.00 while maintaining an Overweight rating on the stock. The stock, currently trading at $72.82, has shown strong momentum with analyst targets ranging from $35 to $105. According to InvestingPro analysis, Block maintains a GOOD financial health score, supported by solid liquidity ratios.
The price target increase comes as Block is set to replace HES in the S&P 500 index effective prior to the opening of trading on July 23.
According to JPMorgan’s Global Quantitative and Derivatives Strategy analysis, Block’s inclusion in the index should drive net indexer demand of 54.2 million shares, representing 759% of current trading volume.
The firm expects S&P 500 indexer demand of 70.9 million shares, partially offset by S&P Composite indexer supply of 16.7 million shares.
JPMorgan’s new $90 price target implies a 5x next-twelve-months gross profit multiple, which represents a slight premium to Block’s current 4x multiple but remains at a discount to fintech peers trading at 7-9x multiples. With a P/E ratio of 17.16x and strong growth prospects, InvestingPro subscribers can access detailed valuation analysis and 10+ additional key insights about Block’s financial performance and outlook in the comprehensive Pro Research Report.
In other recent news, Block Inc. has been announced for inclusion in the S&P 500 index, replacing Hess (NYSE:HES) following its acquisition by Chevron Corp. (NYSE:CVX) This move, set to take effect on July 23, is expected to drive significant demand for Block shares, with JPMorgan estimating a net indexer demand of 54.2 million shares. JPMorgan has maintained an overweight rating on Block and increased its price target from $60 to $90. Additionally, Block’s subsidiary, Cash App, has partnered with actor Timothée Chalamet for a new marketing campaign aimed at promoting financial literacy. This collaboration includes a commercial spot in U.S. theaters and will feature limited edition Cash App Card stamps designed with Chalamet. In other developments, Square, a part of Block Inc., has launched a new handheld point-of-sale device in the UK market, designed to enhance service efficiency for food and beverage businesses. Meanwhile, JPMorgan’s introduction of new data access fees has impacted fintech stocks, including Block, though analysts at Bernstein suggest the effects on larger companies like Block may be limited due to existing agreements with banks.
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