The Ratings Game: Block’s potential for ‘valuation squeeze’ sparks downgrade of Square-parent’s stock

United States

Macquarie analyst Paul Golding likes the long-term outlook for Square-parent Block Inc., but he worries that a potential “valuation squeeze” could put pressure on its shares in the short run.

Golding downgraded Block shares SQ to neutral from outperform Tuesday, writing of the possibility that consensus expectations for earnings before interest, taxes, depreciation, and amortization (Ebitda) could come down and weigh on Block’s stock.