What happened
Shares of Block (SQ -1.57%) were falling this morning after two analysts cut their price targets for the financial services and digital-payment platform company. The tech stock was down by 6.2% as of 10:35 a.m. ET.
So what
Wells Fargo analyst Jeff Cantwell lowered his price target for Block's stock to $120, down from $165, and kept his overweight rating on the shares. Cantwell believes the company's upcoming second-quarter results -- which will be reported on Aug. 4 -- will be mixed.
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Cantwell says that the company could face some headwinds with its Afterpay business -- a buy now, pay later company that Block purchased for $29 billion -- as well as with its Bitcoin holdings, according to TheFly.com. Additionally, Block's target price was lowered by Citi analyst Peter Christiansen to $135, down from $185, but he maintained his buy rating on the stock.
These two price-target cuts come on the heels of Oppenheimer analyst Dominick Gabriele lowering his price target for Block to $112 yesterday, down from $150. He thinks spending could slow in the second half of this year and into 2023. He also thinks the company will be able to manage a potential economic slowdown well.
Now what
Block investors will find out how the company is doing when it reports its latest financial results next week. But it's no surprise to see the company's stock drop this morning as investors process comments from these analysts.
As the broader market continues to experience significant share-price swings as investors try to gauge the economic climate amid rising inflation and Federal Reserve interest-rate hikes, it's likely that Block's stock could experience some more short-term turbulence, as well.
