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Investing.com - Bernstein SocGen Group raised its price target on Block Inc. (NYSE:XYZ) to $95.00 from $90.00 on Monday, while maintaining an Outperform rating on the stock. The new target aligns with InvestingPro’s analysis, which indicates Block is currently undervalued, supported by the company’s perfect Piotroski Score of 9.
The price target increase follows Block’s quarterly earnings report that exceeded market expectations, with the company also raising its guidance. Block now forecasts accelerating Gross Profit growth of 19% by the end of the year, building on its current gross profit margin of 39.64%.
Block’s Cash App business showed reacceleration in growth, primarily driven by its Borrow feature. The company expects additional tailwinds in the second half of the year from expanded eligibility on Borrow and its Proto product.
Square’s Gross Payment Volume is displaying signs of improvement, particularly in international markets, with some positive indicators emerging in the U.S. as well. Overall product velocity appears to be improving across the company’s offerings.
Block shares rose 9% in premarket trading following the announcement. Bernstein SocGen noted that Block’s current valuation stands at 22 times its projected 2026 earnings, which it considers undemanding given the company’s improving profitability, capital allocation, and potential S&P inclusion.
In other recent news, Block Inc. has seen a series of analyst upgrades following its strong second-quarter earnings and revenue results. Keefe, Bruyette & Woods increased their price target for Block to $95, noting a solid rebound in Cash App and improving trends in the Seller segment. TD Cowen also raised their target to $95, highlighting a broad-based bounceback and reacceleration in Cash App’s gross profit, particularly in Borrow, Buy Now Pay Later, and Cash Card services. Needham set a higher price target of $100, citing strong growth in the Square segment and better-than-expected performance in Cash App. KeyBanc also lifted its target to $100, following Block’s earnings that surpassed expectations for both gross profit and adjusted operating income, leading to an increase in fiscal year 2025 guidance. Meanwhile, Morgan Stanley (NYSE:MS) adjusted its target to $77, acknowledging lower share count and debt assumptions despite modestly lowering estimates. These developments reflect a positive outlook from various firms on Block’s recent performance.
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