By Elsa Ohlen

Block stock rose as the investment bank Evercore said it is less concerned that a souring economic climate will hit the fintech's business.

Analysts led by Adam Frisch upgraded shares to Outperform from In Line early Tuesday, saying that trends on the economic front and among customers don't appear as concerning as they seemed initially. The analysts raised their price target on Block stock to $75 from $58, implying a potential gain of 21% from the closing level on Monday.

The stock was up 3.3% to $63.80 in premarket trading. Futures tracking the S&P 500 were down 0.2%.

Shares of Block, the parent of Square, plummeted after its latest set of earnings in May. The company was seen as likely to be among the first casualties as greater economic uncertainty resulting from tariffs affected consumer behavior.

Slowing growth typically leads consumers to spend and invest less. But spending among consumers looking for affordable options is steady and holding up well, the Evercore analysts said, noting that the most severe tariff-related scenarios seem to have been mitigated in recent weeks.

Block stock has had an interesting year. It has risen 33% in the 30 days coming into Tuesday trading, but is still down nearly 28% so far this year.

While Frisch and his colleagues said they were initially concerned that plans to increase lending to new customers on its Cash App to offset lower spending would lead to significant short-term losses, they were "left more positive" after speaking to the company about its funding sources. Its lending portfolio instead looks to be diversified and Block won't absorb 100% of potential losses, they said.

"To be clear, we are still concerned about increased loan exposure in new markets as that almost always brings higher initial losses that fade over time, just not as much as we were initially," Frisch wrote in a research note Tuesday.

New product releases for Square, Block's payment solutions business, also bode well for growth, they said.

Not all analysts are bullish, though. Truist Securities analysts led by Matthew Coad reiterated a Sell rating on the shares Monday, saying the company has limited flexibility to cuts its operating expenses, Barron's reported Monday. Block and PayPal are the fintechs Coad and his team like the least among those they cover.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

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June 03, 2025 09:28 ET (13:28 GMT)

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