Investors should think twice about fleeing Block stock after website connectivity issues, according to Baird Equity Research. The firm reiterated an outperform rating on Block in a Monday note, and designated shares as a bullish fresh pick. However, Baird lowered its price target on the stock to $72 from $92, or about 36% upside from Friday's $53.08 close. Shares of Block have pulled back more than 15% from the start of the year, including a 5.3% drop in Friday trading.
Analyst David Koning says shares may be oversold after the company experienced a temporary outage on its payment processor Square on Thursday and Friday , which triggered the selloff. "Historical breaches/outages generally haven't created long-term issues for large processors, as long as they were addressed/fixed," Koning said. The analyst added that payment issues at large firms like Block have typically abated in the short term and helped jumpstart a stock recovery.
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