NewsletterJack Dorsey’s Block Inc to Enter S&P 500: Barclays
Highlights
- Block might be included in the S&P 500 this year.
- Barclays analysts cite improved financials in previous quarters.
- This follows a jump in shares of related companies.
Jack Dorsey’s Block Inc. continues to attract positives after posting huge numbers in previous quarters. A new Barclays report suggests the company could be added to the S&P 500 benchmark index due to its financials.
Led by former Twitter CEO Jack Dorsey, the financial services firm has marked significant year-on-year inflows with surging stock prices. In the last six months, SQ is up 36.62% amid a flip in market conditions.
Barclays Tips Block For S&P 500
The S&P’s next quarterly rebalance is slated for June 7 with Barclays, with Barclays analysts tipping the firm for a possible inclusion. According to the report, the firm meets the eligibility criteria following the release of its Q4 2024 earnings. A look at the report shows a net income surge to $178 million amongst other positives.
“SQ reached S&P 500 eligibility following 4Q23 earnings in February 2024 as (a) Q4 had positive net income of $178M and (b) the sum of net income over the LTM ending 4Q23 was also positive at ~$125M.”
Although the inclusion is not guaranteed, Block stands a higher chance due to its designation as a financial services firm. Analysts at Barclays opine that sector underweighting could play a role in rebalancing.
“We estimate Financial Services is the second most underweight industry category represented in the S&P 500 index currently (Software & Services being the most under-represented),” they added.
Firm Records Market Surge
Crypto stocks notched a strong performance in the first three months of the year after the approval of spot Bitcoin ETFs by the Securities and Exchange Commission. Subsequently, the price of Bitcoin soared to a new all-time high above $72,000.
This saw an increase in firms that offer Bitcoin-related services. Block’s financial earnings in Q1 topped projections by market analysts as net revenue hit $5.96 billion.
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