BTIG analyst Mark Palmer on March 31 downgraded to "neutral" from"buy," on achievement of price target.
Palmer removed the price target of $15 after the company achievedthat level. The company's shares have seen an increase of almost 80% since Feb.8 and are more fairly valued, the analyst said. Square's shares had dropped belowthe $9 level in February due to several factors, including investors' concerns aboutcompetitive threats, the ability of the company to monetize the base of small businessesit built, cost control challenges, and recession fears that arose early in the year.Some of those concerns appear to have been allayed by Square's solid fourth-quarter2015 report, which highlightedbetter-than-expected adjusted revenue and gross payment volume, Palmer said.
The analyst cited the management statement during the company'sfourth-quarter 2015 conference call, noting that the company expects to achieveprofitability later this year. Palmer said new initiatives in Square Cash peer-to-peerpayments, Square Capital flexible loans and Build with Square application programinterfaces could persuade some investors to hold on to their shares, but he addedthat the uncertainty associated with that event could serve as a headwind.