Block (XYZ) Stock: Analyst Upgrade Follows Earnings Beat and Restructuring

TLDR

• Cantor Fitzgerald raised its price target on Block to $78 from $70 while maintaining an Overweight rating.

• Updated guidance points to fiscal 2026 gross profit of about $12.2 billion and EPS of roughly $3.66.

• Block exceeded fourth-quarter gross profit and earnings expectations, supporting analyst upgrades.

• The company plans to reduce about 40% of its workforce as part of an AI-focused restructuring.

• Analysts expect cost cuts and improved efficiency to support margins and long-term earnings growth.

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Block (XYZ) received a price target increase from Cantor Fitzgerald after updated company guidance and recent earnings results. The firm raised its target to $78 from $70 while maintaining an Overweight rating.

Block, Inc., XYZ

The update follows stronger-than-expected fourth-quarter performance. Block reported a beat on both gross profit and adjusted earnings per share.

The company posted diluted earnings of $2.10 per share over the past twelve months. Gross profit also exceeded analyst expectations, supporting positive revisions to forecasts.

Cantor updated its estimates based on management’s fiscal 2026 guidance. The company expects gross profit of about $12.2 billion and adjusted operating income of roughly $3.2 billion for the year.

Adjusted earnings per share for fiscal 2026 are projected at approximately $3.66. First-quarter guidance includes gross profit of about $2.8 billion and adjusted EPS of around $0.67.

Analyst Outlook and Valuation

Cantor’s new price target is based on 16 times its calendar year 2027 EPS estimate of $4.85. This compares with the previous valuation based on 14 times a lower EPS estimate.

The stock has climbed about 25.5% over the past week. It recently traded near $63.70, giving the company a market capitalization of roughly $38.2 billion.

Block currently trades at a price-to-earnings ratio near 30. Analysts said valuation appears attractive relative to projected earnings growth and discounted cash flow models.

Several other firms reiterated positive ratings following the company’s results and restructuring announcement. UBS, RBC Capital, and Bernstein maintained Buy or Outperform ratings with price targets ranging from the mid-$80s to $90.

Truist maintained a Hold rating with a $72 price target. Raymond James lowered its target to $79 but kept an Outperform rating, citing execution risks.

Workforce Cuts and AI Strategy

Block recently announced plans to reduce its workforce by about 40%. Management described the move as a structural repositioning aimed at embedding artificial intelligence across operations.

Executives said the reductions are expected to create a leaner cost base and more cohesive organization. Analysts believe the changes could support improved operating margins over time.

The company said its Cash App business contributed strongly to recent gross profit growth. Cash App continues to be a key driver of revenue and earnings performance.

Management indicated that revised guidance reflects momentum exiting the fourth quarter of 2025. Updated projections include higher expectations for gross profit, operating income, and earnings per share.

Block shares have been volatile over the past year but gained sharply following the restructuring announcement. Investors continue to monitor execution of cost cuts and updated financial guidance.

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