Shares of Square (NYSE: SQ) jumped on Friday, rising as much as 10.6%. By market close, the stock was up 7.1%.
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The stock’s rise comes as two analysts shared bullish commentary on the financial technology company on Friday. But a positive day for the overall market — especially for tech stocks — almost certainly helped, too.
Canaccord Genuity analyst Michael Graham, who previously had a hold rating on Square stock, upgraded shares to a Buy on Friday (via Barron’s) as he admitted he has “been on the wrong side of Square stock for some time…”
The analyst’s upgrade comes after shares sold off sharply in October amid a broader market decline and news that the company’s CFO was stepping down.
Graham believes the stock’s decline following news that Square CFO Sarah Friar was leaving was unjustified. “While we usually are very careful around C-level departures (and believe Ms. Friar is very talented and a significant loss),” explained Graham, “the fact she is leaving to take a CEO role at a promising company leaves us comfortable that she is moving toward an opportunity and not away from a risk.”
Another analyst from Nomura Instinet, Dan Dolev, also said in a research note (via TheFly) this week that while the CFO’s departure is important, it’s “unlikely to disrupt the [company’s] innovation engine…”
Also likely helping the stock was a rise in tech stocks in general, as the tech-heavy Nasdaq Composite rose more than 2% on Friday.
Graham believes this is a good buying opportunity and set a 12-month price target for Square stock of $90, up from a previous price target of $60. Dolev maintained his buy rating for the stock and a $125 price target.
It’s true that Square is looking more attractive after its decline. The company has been on fire recently, reporting five quarters in a row of accelerating year-over-year revenue growth rates.
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