SQ stock looks like a compelling swing long setup on the chart after two upgrades.
MoffettNathanson and SunTrust upgraded SQ stock to a Buy rating during pre-market trading on September 3, 2019.
SunTrust analyst Andrew Jeffrey upgraded Square to Buy and raised his price target to $80 from $75, saying he expects the company’s 2020 investments in “complex retail and restaurants” to accelerate the growth of its future revenues and EBITDA. The analyst believes that the investments will bolster the company’s capabilities with large, inventory-intensive retailers where Square is currently less competitive, adding that its sale of Caviar also marked the first step in its “repositioning”. While he still sees 2020 as an “investment year”, Jeffrey notes that his expectations of revenue growth at Square beyond next year underpin his upgrade.
We have a clearly definable stop loss just below $60 should the swing trade go against us.
We are not adding SQ to the long-term buy and hold GST Portfolio because of valuation concerns like the stock trades with a market cap of $26.8 billion but Square did $3.9 billion in sales last year. Square has no P/E because earnings are negative. However, a short-term technical swing trade may be setting up here that readers profit from.
Disclosure: We do not hold any position in SQ stock.