Wolfe Research Upgrades Square, Sees More Room To Run After Big 2020 Rally

Despite the strong rally in Square Inc’s SQ stock in 2020, there seems to be more room to run in most pandemic macro scenarios, according to Wolfe Research.

The Square Analyst: Darrin Peller upgraded Square from Peer Perform to Outperform, while raising the price target from $160 to $195.

The Square Thesis: The company “continues to demonstrate its tech differentiation through share gains at the physical POS and more impressively, online,” Peller said.

He added that Square’s online business is growing by around 50% year-on-year, with its Gross Payment Volume stabilizing faster than most peers.

See Also: Oppenheimer Upgrades Square On Massive Digital Shift In Commerce

“Across the industry, 3Q spending growth appears relatively stable (as suggested by V/MA), however, our internal data and checks suggest that SQ is gaining share at an accelerated rate today vs pre-pandemic,” the analyst wrote in the note.

Although the sector is poised to benefit from holiday spending and improving trends in small and medium businesses, the rebound at Square is likely to be “more pronounced, given its relatively newfound positioning in online payments and CNP capabilities at the physical POS,” Peller noted.

SQ Price Action: Shares of Square had risen by 3.8% to $167 at the time of publication Tuesday. The stock began the year trading around $64 a share.