Visa's (V) Stake in Square (SQ) Shows Attractiveness of Square as Potential Takeover Target - BTIG

BTIG affirms Square (NYSE: SQ) with a By rating and $15 price target after Visa (NYSE: V) showed a 9.99 percent passive stake in the company late Thursday.

Analyst Mark Palmer noted that Square, like other payment providers, has taken its share of hits over the last several months amid concerns of increasing competition in the payments space.

Palmer continued: As such, we believe the announcement in a regulatory filing yesterday after the market close that Visa, Inc. had taken a 9.99% stake in SQ was particularly notable insofar as it served as a vote of confidence in the company's business model, its brand, and its ability to continue to grow both domestically and internationally. Visa had invested in SQ in 2011, but the new stake represented an endorsement of the company's current offerings and prospects.

Moreover, we think the announcement should serve as a reminder of SQ's attractiveness as an acquisition target as we believe that as facilitators of electronic funds transfers like Visa, as well as technology giants such as Apple, Samsung and Google, continue to build out their payments capabilities, their efforts to grab turf within the space will drive consolidation.

For an analyst ratings summary and ratings history on Square click here. For more ratings news on Square click here.

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