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On Monday, Raymond (NSE:RYMD) James analysts raised the price target for Block Inc. (NYSE: XYZ) stock to $79 from the previous $74, maintaining an Outperform rating. Currently trading at $61.75 with a market capitalization of $38 billion, Block shows promising potential according to InvestingPro analysis, which indicates the stock is undervalued. The decision follows positive intra-quarter comments from Block’s management and an in-depth analysis of Cash App Borrow, which has bolstered confidence in the company’s projected gross profit growth for the second half of 2025.
The analysts highlighted that Cash App Borrow is expected to contribute significantly to Cash App’s gross profit growth, with a projected increase of approximately 400 to 500 basis points in the third and fourth quarters, compared to around 230 basis points in the first half of the year. Additionally, management’s comments indicated a 13% rise in Cash App’s gross profit for April, excluding one-time benefits. This growth trajectory aligns with Block’s overall revenue growth of 4.6% and its GOOD Financial Health Score from InvestingPro.
Raymond James has adjusted its expectations for Cash App’s gross profit growth in the second quarter to 11%, which is above the street’s consensus of 9%. The estimates for Seller GPV/GP remain largely unchanged.
The analysts noted that with Block’s stock trading at roughly 12 times the estimated 2026 EBITDA, including stock-based compensation, the company needs to meet its targets for the stock to perform better. They expressed increased confidence in the company’s outlook, particularly the anticipated growth in the second half of the year, and suggested that investors consider adding to or initiating positions in Block.
In other recent news, Block Inc. has announced the integration of bitcoin payments on its Square platform, marking a significant development in its payment system. This initiative, set to roll out in the latter half of 2025, will enable merchants to accept bitcoin directly, enhancing transaction speed and reducing costs. Additionally, Fitch Ratings has upgraded Block’s Long-Term Issuer Default Rating from ’BB+’ to ’BBB-’, citing the company’s improved profitability and cash generation. The rating upgrade affects approximately $5.8 billion of Block’s outstanding debt.
Analysts have also shown optimism toward Block Inc.’s stock. Mizuho (NYSE:MFG) Securities has increased its price target to $71, maintaining an Outperform rating, driven by a correlation between rising Bitcoin prices and increased user engagement on Block’s Cash App. Similarly, Wolfe Research has raised its price target for Block to $75, highlighting the company’s potential despite recent stock underperformance. Jefferies has reiterated a Buy rating with a $60 price target, noting improvements in credit losses across Block’s lending products, including Afterpay.
Block’s ecosystem continues to expand, with various bitcoin-related services and products contributing to its growth strategy. The company’s efforts to integrate cryptocurrencies and enhance financial services align with its broader objectives, as reflected in these recent developments.
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