Improving momentum alongside a cheaper valuation could drive upside for shares of Block , according to Truist Securities. The investment firm upgraded the fintech stock to buy from hold. Analyst Matthew Coad’s price target of $77, up from $72, implies an upside ahead of 29%. “We came into the year relatively cautious on Block as we worried that the ongoing business mix shift to lending-related activities would result in worse than Street expected margin expansion as well as multiple compression,” Coad wrote. “We now see upside potential to Street margin expectations following the ~40% reduction in force, the stock has meaningfully de-rated (as it now trades at 12x our 2027 EPS), and we believe capital return could surprise to the upside as FCF generation improves.” The analyst wrote that Square’s new business momentum is encouraging, with new volume added increasing by 27% year over year in the fourth quarter. “We expect Square’s improved new business momentum to provide a greater boost to overall volume growth in 2026 and that growth may accelerate further in 2027,” he said. “After more than a year of [monthly transacting actives] being stagnant at ~57mn, Block has added 2mn Cash App MTAs over the past two quarters, we believe in-part due to the utility of Cash App Borrow and Cash App Green which is driving higher activity levels for users that previously transacted less frequently.” Meanwhile, new business applications in the U.S. are up 15% year over year after several years of stagnation. This could result in better-than-expected U.S. business formation and hence growth in Square’s net new accounts in the U.S. this year. Coad added that outsized growth within its international business continues to boost Square’s overall volume growth. Shares of Block have slipped 8% this year and are flat over the past 12 months. Coad said the stock now looks cheap on a comparable price-to-earnings basis and when adjusted for top-line growth, and is the bank’s preferred “value” name within the payments and fintech world.
