Square's Stock Rallies After Stifel Nicolaus Analyst Turns Bullish

Shares of Square Inc. surged 2.3% in premarket trade Tuesday, after Stifel Nicolaus turned bullish on the payments processing company, citing increased confidence in the company's ability to show sustainable growth. Analyst Scott Devitt raised his rating to buy from hold, and set a stock price target of $15, which is 27% above Monday's closing price of $11.82. After three quarterly reports since going public nine months ago, Devitt said Square has shown consistent "strong execution" in the development of its platform. In addition, two post-IPO lock-up expirations have already passed. "Square has generated better-than-expected top-line growth despite investor concerns surrounding the competitive threats and the size of the actual addressable market," Devitt wrote in a note to clients. The stock, which has whipsawed within a range of $8.37 to $15.48 since it went public on Nov. 19, closed Monday 31% above its IPO price of $9. The S&P 500 has 4.8% over the same time.

Copyright © 2016 MarketWatch, Inc.