Nomura Instinet analyst Dan Dolev raised his price target for Square (SQ) to $110 from $108 following the launch of Square Card, the company's free business-to-business debit card. The shares closed yesterday up $1.29 to $69.10.
The launch "kills several birds with one stone" as it taps the multi-trillion underpenetrated B2B commerce market, gets Square paid multiple times on existing gross payment volume dollars and deepens its disintermediation of banks, a concern that Fiserv's (FISV) CEO expressed just last week, Dolev tells investors in a research note. The analyst sees marginal revenue contribution from B2B debit near-term, but longer term, he believes Square has a $50B total addressable market opportunity.
The growing importance of B2B credit cards could prove to be a boon to Square, says Dolev. He keeps a Buy rating on the shares.
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