Block Falls as Evercore ISI Outlines 7 Reasons to Sell Stock By Investing.com

By Senad Karaahmetovic

Evercore ISI analysts added shares of Block (NYSE:) to the firm’s Tactical Underperform list. The analysts have an Underperform rating with a $49 per share price target on Block stock, signaling a nearly 20% downside from current levels.

Just a day before the company is due to release its earnings, the analysts highlighted 7 reasons why they believe Block stock is a sell.

1. Evercore is 4% below consensus on Gross Profit for 2023E;
2. Block may struggle to sustain the rapid pace of innovation;
3. Increasing competition is facing SQ Seller;
4. Stiffening competition within BNPL;
5. High interest rates challenge unit economics and mission of $29 billion Afterpay acquisition;
6. Increasing FX headwinds; and
7. No capital return either through share repurchase or dividends.

As far as estimates are concerned, the analysts see a downside of 4% and 10% to Consensus 2023 Gross Profit and Adjusted EBITDA, respectively.

Block stock price is down about 2% in pre-open Wednesday. Shares are trading about 65% lower year-to-end.