Shares of fintech company Block, founded by Jack Dorsey, rose by almost 9% after the news that it will be included in the S&P 500 index. Inclusion in the index will provoke additional demand for securities on the part of funds, which should lead to an increase in quotations, analysts say. Most of them recommend buying the shares, which have fallen in price by more than 7% since the beginning of the year;

Details

Shares of fintech company Block (formerly Square), founded by billionaire Jack Dorsey, jumped 9% in trading on Monday, the most since early April 2025. Late last week, S&P Dow Jones Indices announced that Block would join the S&P 500 Index, replacing oil and gas company Hess after its merger with oil giant Chevron. The change in the index's composition will take effect before trading begins on July 23.

The decision to include Block, with a capitalization of about $44.8 billion, in a major U.S. stock market index was a landmark moment for the entire fintech sector, writes Reuters. It confirms the company's status as one of the most valuable and influential players in the financial technology market and demonstrates how digital payments and fintech applications are entering the mainstream, displacing traditional banking models in the U.S., the agency said.

What the analysts are saying

J.P. Morgan estimates that Block's inclusion in the S&P 500 Index should generate net demand from index funds for 54.2 million shares of the company.

"We believe Block deserves a higher multiple given the recent momentum in product development and marketing, and its inclusion in the S&P 500 supports this," the bank's analysts said.

Currently, according to data from MarketWatch, Block's stock is trading at a P/E (price/earnings) multiple of 16. By comparison, the S&P 500 has a cap of about 27.

"Inclusion in the S&P 500 Index underscores Block's history as a company focused on innovation, profitability and continuous margin improvement," said Argus Research analyst Stephen Biggar. 

Since the beginning of the year, the company's stock is down 7.5%. Of the 46 analysts covering Block securities, 33 advise buying the company's shares (Buy and Overweight ratings). Nine treat them neutrally (Hold), while four advise selling them. The average target price is 2.8% above the closing price on July 18.

This article was AI-translated and verified by a human editor

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