11:29 AM EDT, 08/05/2025 (MT Newswires) -- Block (XYZ) is seeing monetization potential and it is anticipated to "rely more" on credit expansion for supporting its durable double-digit gross profit growth, Morgan Stanley said in a Tuesday note.

Credit expansion and direct deposit accounts are likely to be the two metrics to estimate long-term growth potential, as compared to the near-term P&L benefits of increased Cash App Borrow and Afterpay volumes, the note added.

There is "healthy acceleration" expected in the company's Cash App in Q2 and beyond due to enhanced business trends and stable consumer spend backdrop, the note said.

"For now, we're comfortable with our Cash App gross profit growth forecasts of+15% this year, with+12% growth in 2Q," according to the note.

Morgan Stanley downgraded Block to equalweight from overweight with a $73 price target.

Shares of the company were down 2% in recent Tuesday trading.

Price: 74.56, Change: -1.56, Percent Change: -2.05