Raymond James raises Block stock price target on Cash App strength

Raymond James raised Block’s price target to $100 from $97 and maintained Outperform, citing third-quarter adjusted operating income 5% above expectations and gross profit 2% above expectations. Cash App gross profit grew 27%, beating consensus by 5%, while Square Seller gross payment volume growth accelerated to 14% from 12% expected. Block raised 2026 gross profit guidance by 1% and adjusted operating income guidance by about 1.5%; its initial 2027 outlook calls for at least 15% gross profit growth and 30% adjusted operating income growth. Analyst views remain mixed: TD Cowen raised its target to $109, while Morgan Stanley cut its target to $80 and downgraded the stock.

Analysis

The debate is less about the quarter’s beat than whether Block can convert Cash App growth and Seller volume into durable, cash-based operating leverage. The initial 2027 outlook implies leverage beyond gross-profit growth, but investors should verify that gains survive credit and transaction losses—and are not mainly an adjusted-metric story. The cited 2028 EBITDA multiple includes stock-based compensation, which makes it a more useful valuation anchor than an SBC-excluding comparison, but does not by itself establish that the shares are cheap.

Near term, positive revisions and multiple bullish targets may leave less room for another estimate-driven rerating; the divided analyst stance is evidence of a contested thesis, not a catalyst. Over the next 1–3 months, watch Cash App gross-profit durability, Seller volume translating into gross profit, and loss trends. Over 6–18 months, the key test is whether operating income growth outpaces gross profit without rising dilution or credit costs. A deterioration in loss metrics, weaker Cash App growth, or guidance retreat would undermine the bull case. The bylaw change has no evident near-term earnings channel from the information provided.

Key Decisions for Investors

• Avoid chasing the analyst-target revisions alone. Consider a staged long in Block (XYZ) only if subsequent results confirm Cash App growth and Seller monetization; keep exposure sized for execution and credit-loss risk. No price target is warranted from the supplied data.
• For a defined-risk expression, consider a call spread rather than outright calls only after confirming the next catalyst date, implied volatility, and strike liquidity. The reported earnings-implied move is event-specific and should not be treated as a forward forecast.
• Set a thesis review trigger: cut or reassess if management reduces the 2027 outlook, Cash App gross-profit growth materially decelerates, or transaction/loan losses rise enough to erode adjusted operating leverage. Verify these metrics in reported results and guidance before adding.