J.P. Morgan Securities upgraded Marqeta (NASDAQ:MQ) on the progress made by the card issuing platform since the investment bank’s March 2023 downgrade.
MQ was 2.78% up on Monday during morning trade to $5.18.
J.P. Morgan had downgraded the shares in 2023 to Neutral from Overweight after its FY23 net sales guidance came in markedly below Wall Street expectations.
“It is time to move to the sideline on the stock given trade-off of lower near-term growth with longer-term certainty due to stepped up renewals, including Visa (V) that surprised us to the downside,” analyst Tien-tsin Huang had written in a note to clients.
In addition, Huang had pointed out that the Block (XYZ) renewal continues to be an overhang.
In the latest note to clients, Huang said, “We are upgrading MQ from Neutral to Overweight. Since we downgraded the stock in March 2023, the company has managed through: (1) the majority of its largest customer renewals, most notably Block, (2) regulatory-related customer onboarding delays which slowed 2024-25 growth, and (3) management changes.”
“Marqeta has also made progress diversifying away from its largest customer Block (45% of revenue vs. 71% at the time of our downgrade in 2023) with non-Block TPV growing 2X as fastas Block,” said the analyst.
“We prefer companies with a breadth of growth levers, and think the reduced dependence on XYZ supports MQ’s strategic value as an enabler of coveted card revenue for non-banks,” added Huang, raising the price target on the stock to $6.00 from $5.00.
The rating aligns with the average sell-side analysts and Seeking Alpha authors rating of Buy. Meanwhile, the Quant Rating system grades the stock as Hold.