12:02 PM EST, 11/08/2024 (MT Newswires) -- Block's (SQ) mobile wallet service Cash App is still taking too long on expanding its banking features, Morgan Stanley said in a note Friday.

"We've consistently said that Block needs to accelerate expansion of credit products to its Gen Z/millennial user base to capture the demographic opportunity before those users build financial relationships elsewhere," the investment bank said, adding it is likely that most young, higher-quality banking consumers already have relationships outside Cash App for credit and other banking services.

Cash App's ability to meet the borrowing needs of users is also limited compared with traditional banks, according to the note.

Morgan Stanley said it has yet to see factors such as improved attach rates on paycheck deposits and retention meaningfully enhancing Cash App metrics like inflows per active, monthly active users, or monetization rate sequentially year-to-date.

Morgan Stanley boosted its price target on Block to $60 from $55 and maintained its underweight rating.

Block shares were down 4.3% in recent Friday trading.

Price: 72.01, Change: -3.26, Percent Change: -4.33