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Keefe, Bruyette & Woods analysts downgraded Block (NYSE:SQ) shares to Market Perform from Outperform.
The analyst price target is $75 per share, implying ~10% upside potential in shares relative to Friday’s close.
“We think SQ’s risk/reward profile has become less attractive as multiple risks are starting to add up,” they said in a client note.
The analysts see a number of “growing risks” facing Block’s Cash App that are likely to “keep investors out of the name over the next year, primarily around rising competition in acquiring, and potential for regulatory scrutiny.”
Shares of the fintech company recently fell after a short-seller issued a report alleging inflated user metrics for Cash App.
Block shares trade 1.6% lower in premarket Monday. Overall, the SQ stock is up 8.4% year-to-date (YTD).
