What happened
Shares of Block (SQ 0.22%) bounced back on Tuesday, jumping more than 5% in early trading, reaching a high of $66.54 just after the opening bell. The price dropped a bit, but was still up about 2% as of 3:10 p.m. ET today.
It wasn't a particularly good day for the markets, as both the S&P 500 and Nasdaq Composite were largely flat. Block's performance might be due to investors jumping in after a bad day on Monday.
So what
Block took a hit on Monday after Sanjay Sakhrani, an analyst with Keefe Bruyette & Woods (KBW), dropped Block's price target from $150 to $100. That still represents roughly a 53% increase over current levels.
With the lowering of the target, Block's share price dropped 5.6% on Monday. The mobile payment provider is down 59% year to date and is down 73% over the past year.
NYSE: SQ
Key Data Points
While maintaining a buy rating, the KBW analyst said the price target was lowered based on the expectation of slower economic growth in the near term. Block wasn't the only payment processor that KBW lowered the price target for -- it did the same with PayPal (PYPL +0.28%).
Block had become astronomically overvalued during its run-up last year, and it still has a high forward price-to-earnings ratio of 88. But investors might have jumped in today and bought the most recent dip on Monday. PayPal was also up a similar amount on Tuesday.
Now what
The big news on the horizon is the Consumer Price Index (CPI) report, which measures inflation. The report comes out Wednesday and that could affect Block and other payment companies.
Also, the big banks post second-quarter earnings starting Thursday, so those results could provide insights for Block investors.
