Stock futures rose Tuesday and Wall Street rebounded modestly from Monday's decline brought on by jitters about the spread of the delta variant of the coronavirus and soft U.S. manufacturing growth.
TheStreet's Jim Cramer has said that he sees Square's (SQ) - Get Square, Inc. Class A Report $29 billion takeover of Australia's Afterpay as an "overpay," but added that Wall Street thinks that Square can do no wrong.
Cramer: Wall Street Wants Millennials
Cramer noted that services like "buy now, pay later" are red-hot with millennials, and that's why the acquisition of the Australian payments rival was so well-received.
Square said that "buy now, pay later" represents a huge opportunity for the company, as deferred payments still only account for 2% of total online sales.
"The bottom line: Buy now and pay later is a necessity if you're a millennial," Cramer said on "Mad Money," "and if you're a millennial Wall Street wants to follow companies that cater to you."
Cramer called the acquisition "brilliant," noting the analysts love the deal as well and several of them lifted their price targets or upgraded the stock.
Cramer: A Lot of Room to Run
Canaccord analyst Joseph Vafi, for example, raised his price target on Square to $310 from $280 while keeping a buy rating on the shares.
Vafi said the Afterpay acquisition will accelerate the evolution of bringing together the seller ecosystem and Cash App as "buy now, pay later" is quickly emerging as a core product that benefits both merchants and consumers.
Cramer said in a recent Real Money column that markets want to "figure out what millennials want - even if they can't afford it - and then give it to them."
Square, Cramer said, which owns many a register and "has captured the hearts of millennials and gen-exers with its Square Cash App, a wildly popular payment services."
"Square believes that of the 10 trillion in on-line payments, only 2% is buy now pay later," Cramer said. "That's a lot of room to run."