Investment bank Piper Sandler has taken rating actions on several payment and consumer finance stocks. Notably, it has upgraded Block, Inc. (XYZ.US) by two notches, moving it from Underweight to Overweight, while assigning a Neutral rating to PayPal Holdings Inc (PYPL.US).

Analyst Bill Carcache stated, "We are initiating coverage on the Payments and Consumer Finance sector with a selectively positive view," adding that "recent underperformance has been driven primarily by multiple compression rather than deterioration in earnings per share."

The firm explained its rationale, noting, "Our positive view is based on company-specific drivers: the network resilience and service growth at Visa Inc (V.US) and Mastercard Incorporated (MA.US); the robust compound growth at American Express Company (AXP.US); the earnings potential for Capital One Financial Corporation (COF.US) from its Discover acquisition; gross profit growth and margin expansion at Block; and resilient recurring loan revenue and scalable GAAP EPS growth at Affirm Holdings, Inc. (AFRM.US)."

Regarding PayPal, the Neutral rating reflects a balance between its low valuation and unresolved pressures on take rate and transaction margins.

The specific rating changes and price targets are as follows:

Block, Inc. (XYZ.US): Upgraded two levels from Underweight to Overweight; price target raised from $58 to $100.

PayPal Holdings Inc (PYPL.US): Rated Neutral; price target lowered from $46 to $42.

Affirm Holdings, Inc. (AFRM.US): Rated Overweight; price target $103.

American Express Company (AXP.US): Rated Overweight; price target $396.

Capital One Financial Corporation (COF.US): Rated Overweight; price target $254.

Mastercard Incorporated (MA.US): Rated Overweight; price target $597.

Visa Inc (V.US): Rated Overweight; price target $394.