Faure将Block(前身为Square)的评级从增持下调至中性，理由是“Cash App的历史毛利润驱动因素正在放缓。”与此同时，分析师Johnny Zhang指出，继第三季度的减速之后，Block的总支付量预计将在第四季度达到拐点，并在2025年重新加速。Global digital payment scale growth has been unsatisfactory this year. BNP Paribas in France expects the performance to remain weak in the coming year, hence has downgraded the rating recommendations for some consumer payment companies.
According to the Economic APP, the global digital payment scale growth has been unsatisfactory this year. BNP Paribas in France predicts that the performance will continue to be weak in the next year, and has therefore downgraded the rating recommendations for some consumer payment companies, such as Block (SQ.US), Toast (TOST.US), and Fidelity National Information Services (FIS.US).
Analyst Alexandre Faure wrote in a recent client report, 'The United Kingdom is the only country where we have seen growth accelerating from a low base. The US and Italy should be able to maintain growth, which is encouraging compared to Germany and France, but not too exciting.' The report is based on a survey by BNP Paribas in France, which recorded responses from 3,000 consumers in the USA, UK, Germany, France, and Italy.
Faure downgraded the rating of Block (formerly Square) from shareholding to neutral in a recent customer report, citing 'the historical profit drive factor of Cash App is slowing down.' Meanwhile, analyst Johnny Zhang pointed out that after the deceleration in the third quarter, Block's total payment volume is expected to reach a turning point in the fourth quarter and accelerate again in 2025.
Moreover, the analyst also believes that Fidelity National Information Services may face headwinds due to software licenses, the capital market solutions department might be disappointing next year, thus downgrading its stocks from neutral to underperform.
Additionally, he downgraded the rating of Toast, a restaurant software supplier, to neutral, citing 'the growth of subscription services slowing down was delayed in the third quarter, which we believe is inevitable and has not been captured by market consensus.'
Since Donald Trump won the U.S. presidential election on November 6, a series of U.S. payment stocks such as Block (SQ.US) and Toast have been garnering higher ratings, albeit 'far from the substantial acceleration of U.S. consumer spending in the first part of Trump's first term.' The recent excellent performance of the above stocks is also another key factor behind Faure's rating downgrade.
The analyst wrote: "Investors seem to have already digested some smaller possibilities, namely that US consumer spending may improve and bring positive surprises."
The latest batch of US economic data shows that consumers still have resilience, with retail sales in October exceeding widespread expectations and September expectations seeing significant upward revisions. At the same time, consumers became more optimistic last month, with slight decreases in inflation expectations and improvements in labor market expectations.
Other payment stocks for reference are as follows: PayPal Holdings (PYPL.US), Fiserv (FI.US), Global Payments (GPN.US), Adyen (ADYEY.US), Paysafe (PSFE.US), Shift4 Payments (FOUR.US), Repay Holdings (RPAY.US), PagSeguro Digital (PAGS.US).
