BofA maintained a Buy rating and $86 price target on Block Inc (NYSE:SQ) Wednesday, stating that the stock "remains undervalued."
Analysts told investors in their 2Q preview note that they expect the company's "strong and steady performance to continue." SQ is set to report earnings on August 3.
"We think consensus 2Q estimates are well-calibrated. Last quarter, SQ suggested that 2Q overall gross profit (GP) growth trends would remain stable vs. April GP growth of 24% y/y, and BofA/Street are both at 23%," the analysts wrote.
Given the ongoing expense discipline, BofA believes another adjusted EBITDA beat is plausible for Block. The analysts also noted that SQ's recent stock price performance has been buoyed by the market's more favorable view on macro/crypto.
"At 6.6x C23E EV/GP, we believe SQ remains undervalued and business model resilience is underappreciated," the analysts concluded.