Evercore ISI says this beat-down fintech stock can stage a recovery rally

CNBC

3 days ago

Evercore ISI turned bullish on Block , citing enough positive indicators on business fundamentals despite a rough patch for shares. Analyst Adam Frisch upgraded shares of the financial technology platform to outperform from in line and hiked his price target by $17 to $75. Frisch now expects shares can jump 21.4% over Monday's close. One driver of the upgrade is that the Cash App platform won't be as aggressive on lending as originally expected following first-quarter earnings. Frisch initially believed that lending could be used to offset lower numbers, but conversations with contacts soothed those concerns. He noted that the company doesn't absorb all of the losses as they are diversified within a broader group of investors. "When we heard mgmt talk about their plans to increase lending to new consumers in new states and with higher limits on the 1Q25 earnings call, we admittedly got very worried that the strategy to get more aggressive on lending to offset lower spending levels would lead to significant losses in 2H25 and potentially beyond," Frisch wrote to clients in a Tuesday note. "However, we were left more positive after speaking to management about XYZ's various funding sources across its lending portfolio." Frisch also said the lower-end consumer is showing steady spending trends despite macroeconomic uncertainty. Additionally, he said new product releases can aid growth going forward and noted that valuation is still attractive despite the stock's recent pop. With this call, Frisch is in the majority of Wall Street analysts with buy-equivalent ratings, according to LSEG. His price target also went from below to above average, per the market data provider. XYZ YTD mountain Block in 2025 Block shares added more than 3% in Tuesday's premarket. Despite a bounce of more than 5% last week, the stock has still plunged more than 27% in 2025.