Piper Sandler restarts coverage of payment and consumer finance, Block (XYZ.US) upgraded to "Buy" from "Hold" rating.

Investment bank Piper Sandler has taken rating actions on several payment and consumer finance stocks, including upgrading Block (XYZ.US) by two levels from "underweight" to "overweight," and giving PayPal (PYPL.US) a "neutral" rating. Analyst Bill Carcache stated, "We are initiating coverage of the payment and consumer finance sector with a selectively positive view," and "recent underperformance has been mainly driven by multiple contraction rather than deteriorating earnings per share." The bank pointed out, "Our positive views are supported by specific drivers for each company: Visa/Mastercard's network resilience and service growth, American Express' stable compounding growth, Capital One's profit potential from acquiring Discover, Block's gross profit growth and margin expansion, and Affirm's resilient recurring lending income and scalability of GAAP earnings per share. PayPal has a neutral rating due to its low valuation which offsets unresolved pressure on transaction fees and trading margins." Specific rating adjustments include: Block (XYZ): Upgraded from "underweight" to "overweight," with a target price raised from $58 to $100; PayPal (PYPL.US): Rated "neutral," with a target price lowered from $46 to $42; Affirm Holdings (AFRM.US): Rated "overweight" with a target price of $103; American Express (AXP.US): Rated "overweight" with a target price of $396; Capital One Financial (COF.US): Rated "overweight" with a target price of $254; Mastercard (MA.US): Rated "overweight" with a target price of $597; Visa (V.US): Rated "overweight" with a target price of $394.