Barclays said Block (SQ.US) was seen as a “likely” candidate for inclusion in the S&P 500 index, and the bank also gave Block an “additional” rating.
The Zhitong Finance App learned that Barclays said that based on Block (SQ.US)'s fourth-quarter results, the company was viewed as a “likely” candidate to be included in the S&P 500 index, and the bank also gave Block an “gain” rating.
Financial reports show that in the fourth quarter of 2023, all of Block's profit indicators improved, with net profit of US$102 million and adjusted EBITDA of US$562 million, a year-on-year increase of 2 times.
Barclays analyst Ramsey El-Assal believes that Block is “increasingly likely to be included in the S&P 500 Index in the future, and is a potential catalyst”. He pointed out that Block's positive GAAP net profit for the fourth quarter was a qualifying factor.
Although El-Assal warned that inclusion (S&P 500) was “not guaranteed,” he explained that the choice to be included in the index “is to some extent freely determined, and the industry balance of the index with the broader corporate market within the same market capitalization is a clear standard.”
El-Assal wrote that the financial services sector is estimated to be the second-lowest weighted industry category in the index, and further stated, “This low weight makes Block with a market capitalization of $45 billion a possible candidate for inclusion.”
On Thursday, Block raised its 2024 full-year guidance and announced first-quarter earnings and revenue that surpassed Wall Street expectations, and the company's stock price rose thereafter.