Block Outlook Seen 'Favorable' With 'Attractive Opportunity' on Shares Before Q1 Results, BofA Says
11:55:30 AM ET, 04/22/2024 - MT Newswires
11:55 AM EDT, 04/22/2024 (MT Newswires) -- Block's (SQ) outlook is "favorable," and this year's pullback in shares presents a "particularly attractive opportunity" before Q1 results, BofA Securities said Monday in a note.
Gross profit in Q1 is expected to be in line with forecasts with 2024 guidance reiterated, BofA said. "Some EBITDA upside (flowed through to FY) would be a positive catalyst," the report said.
If [Block] can achieve its 2026 "Rule of 40" targets with mid-teens gross profit growth and mid-20% adjusted operating income margin, "we believe that shares could see significant multiple expansion," BofA said.
"Given ongoing expense discipline and a likely conservative margin guide," the company may raise its 2024 adjusted EBITDA and adjusted operating income outlook again, BofA said. "We tweak up our 2024 EBITDA estimate to $2.66 billion from $2.64 billion."
BofA reiterated its buy rating on Block with a price objective of $93. The company's results are scheduled for May 2.
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