Morgan Stanley analysts downgraded Block Inc. shares to Underweight from Equal Weight on Thursday, citing “high market penetration and limited additional opportunity to expand banking/credit services for Cash App.”Block shares fell 3.6% in premarket trading.
In contrast to those views, the Wall Street giant’s analysts believe there is a risk to Cash App’s growth prospects in the long term, based on their “demographic analysis of the US Gen Z and millennial population, Cash App's already high market penetration, and limited incremental contribution from a potential new credit card and additional banking services.”
They now project Cash App gross profit forecasts for Block at $4,906 million in 2024, down from a previous estimate of $4,993 million and below the consensus of $5,054 million.