What happened
A onetime investor darling in the finance sector, next-generation payments company Block (SQ 5.71%) isn't such a hot item these days. Analysts are cooling on it, too, as evidenced by a fresh price-target cut Wednesday from one pundit following the stock. After that, Block closed nearly 3% lower on a generally up day for equities.
So what
Piper Sandler's Christopher Donat is the analyst in question. This morning, Donat revised his price target downward, to $84 per share from the previous $105. He's maintaining his neutral recommendation on Block stock.
It wasn't immediately apparent why Donat did so, but this isn't the first such move in recent days.
Last Thursday, Donat's peer at Truist Securities, Andrew Jeffrey, also used a pair of scissors on his Block price target.
Jeffrey reduced his to $105 from $145. Like Donat, the Truist prognosticator is maintaining his recommendation. But unlike that of his fellow analyst, Jeffrey's recommendation is buy. He believes that payment processors face short- to mid-term challenges in maintaining their profit margins, among other obstacles. Still, he thinks the segment as a whole still has potential, and Block remains his No. 1 fintech stock pick.
NYSE: SQ
Key Data Points
Now what
Regardless of Jeffrey's still-sunny outlook, the twin price-target chops won't help lift sentiment on Block stock. Many investors are shunning fintechs these days, given the economic slowdown that numerous pundits are predicting. The trend to ditch youthful highfliers (like Block once was) in favor of safety stocks is in force, and fintechs like Block are generally considered to be relatively risky assets.
