PYPL - Square stock advances after Jefferies issues Buy rating calling it a 'must own'

Square (NYSE:SQ) stock gains 3.0% after Jefferies analyst Trevor Williams assumes coverage of the fintech with a Buy rating, calling the stock a "must-own over the long-term as a proven innovator." Williams views Square's (SQ) Cash App  as "the leader within the crowded neobank category", expects market share gains in Seller, and potential synergies from Afterpay (OTCPK:AFTPY) to be 12% accretive to pro forma gross profit by FY2025. Price target of $300 implies 0.7x growth-adjusted multiple on FY2023 gross profit vs. peer average of 1.06x. Looking at Q3 risks, Williams points out that Street estimates for Seller imply an acceleration to the two-year CAGR in August/September from July levels and Cash App gross profit to stay flat vs. July even as enhanced unemployment benefits end. Square's (SQ) P/E GAAP (trailing twelve months), falls below those rival PayPal's (NASDAQ:PYPL) and Fiserv's (NASDAQ:FISV) in the past couple of months as seen in the chart below.

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Square stock advances after Jefferies issues Buy rating, calling it a 'must own'