By Sam Boughedda
Investing.com -- BMO analyst James Fotheringham upgraded Block Inc (NYSE:SQ) shares to outperform from market perform on Monday.
The analyst has a price target of $159 for the financial services and digital payments company, signaling a potential 33% increase from when the announcement was made. Block, formerly known as Square, shares rose 4.6% on Monday.
In a note to clients, Fotheringham said that they expect Block will "surprise positively" on growth and earnings.
The analyst has a more bullish view on the company due to out-year forecasts in which he believes there will be a "softer landing for Cash App (faster user growth and broader product monetization) and higher Afterpay accretion to revenue growth (+2%) and earnings (+4%)."
"We look forward to guidance regarding synergies expected from SQ's recently-completed acquisition of Afterpay, and the benefits of connecting SQ's merchant-facing Square business to its consumer-facing Cash App business via BNPL," added the analyst.
Fotheringham pointed to the company's Investor Day on May 18 as a potential positive catalyst for the stock.