The S&P/ASX 200 Index (ASX: XJO) is having a very pleasant day of trading so far today. The ASX 200 is currently up a healthy 1.03%. But that’s nothing compared to the Block Inc CDI (ASX: SQ2) share price.
Block shares are up an extremely pleasing 13.03% at $175.54 a share. That puts the US-based payments company formerly known as Square at close to a 35% gain over just the past 5 days alone. So what’s behind this extraordinary rise this Tuesday?
Well, it’s not entirely clear. Block did report its full-year financial results last week, which seems to have given the company a bit of a turbocharge. As my Fool colleague Bernd covered at the time, Block recorded a 62% year-on-year rise in gross profits to $4.42 billion. That came in addition to a 104% increase in adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) to $1.01 billion.
These results saw the Block share price rise a whopping 39% at one point on the day they were released. This enthusiasm has continued to hold ever since.
Block shares square up
But we do have some more recent news that could be affecting today’s big rise too. According to NABtrade, Block’s US shares have received some positive attention from some brokers across the Pacific. The site reports that BMO Capital Markets has upgraded Block Inc (NYSE: SQ) shares to ‘outperform’.
The broker likes Block’s acquisition of Afterpay as well as the strength of its flagship Cash App service: “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.”
BMO has given Block’s US shares a price target of US$159, which is well above the company’s last price of US$127.50.
So this optimism for Block might be responsible for the goodwill flowing into block’s ASX listing that we are seeing today. Either way, it is certainly a dramatic turnaround for a company that, until just a few days ago, was down close to 35% in 2022 alone. Its year-to-date losses now stand at just 0.6%
At the current Block share price, this payments company has a market capitalisation of US$73.96 billion.
The post Here’s why the Block (ASX:SQ2) share price is surging 13% today appeared first on The Motley Fool Australia.
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More reading
- 3 ASX tech shares going gangbusters today
- Why Adbri, Appen, Block, and Life360 shares are storming higher
- Back on the horse! ASX tech shares stage stunning comeback following sell-off
- ASX 200 (ASX:XJO) midday update: Block rockets, Blackmores sinks
- Block (ASX:SQ2) share price rockets 39% today as profits soar
Motley Fool contributor Sebastian Bowen owns Block, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Block, Inc. The Motley Fool Australia owns and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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