What happened
For the second time in as many days, onetime fintech industry high flier Block (SQ +1.84%) was hit with an analyst price target cut. Investors weren't happy about this, and expressed their displeasure by trading the company's shares down by almost 6% on Tuesday.
So what
Tuesday's cutter was Credit Suisse's Timothy Chiodo, who reduced his price target by $20 to $105 per share. Chiodo remains in the Block bull camp, however, as he maintained his outperform (read: buy) recommendation in doing so. His reasoning for the move wasn't immediately apparent.
That wouldn't necessarily have led many investors to pull the sell trigger, but the Credit Suisse note came on the heels of a similar move on Monday from another prognosticator. This was Keefe Bruyette's Sanjay Sakhrani, with a deeper cut from $100 per share to $78. Similar to Chiodo, however, Sakhrani remains optimistic about Block's prospects by maintaining his own outperform assessment.
As with many other analysts tracking financial stocks, Sakhrani is concerned about the wider macroeconomy; after all, companies such as Block are directly exposed to this. A dampening consensus outlook for the U.S. economy's future spurred his price target cut, although he hopefully described the core fundamentals for the payments segment as "relatively stable."
NYSE: SQ
Key Data Points
Now what
These voices of concern reflect investor worries about companies linked tightly to the broader economy. Rising interest rates are a concern, as is the inflation that persists despite the recent Federal Reserve interest rate hikes. We can imagine Block and its fintech peers will continue to be out of favor with investors until the environment notably improves.
