Cantor Fitzgerald trimmed its price objective on Block Inc. (NYSE:XYZ) to $70 from $87 on Monday but maintained an Overweight recommendation on the shares. The revised target still implies substantial upside relative to the stock's trading level near $50, after the shares have declined by more than 40% over the past year according to InvestingPro data.
The analyst house lowered its outlook for Seller gross payment volume - GPV - to roughly 10.0% growth following comments from Block management at an investor conference. Management signaled an anticipated sequential slowdown in fourth-quarter Square GPV, attributing the deceleration in part to adverse weather in October and a challenging year-ago holiday spending comparison.
Cantor Fitzgerald noted that recent compression in valuation multiples across the payments sector contributed to the downward adjustment in the price target. The new $70 target is derived from an equal-weighted valuation combining approximately 14 times the firm's calendar year 2027 EPS estimate of $4.46 and a discounted cash flow analysis. The firm left its 2027 EPS estimate unchanged at $4.46; the prior $87 target had been based on roughly 17 times the firm's fiscal year 2027 EPS estimate of $4.46.
The research team updated its model to better align with management's commentary on near-term trends, reflecting the expectation of a sequential slowdown in Square Seller GPV. InvestingPro data cited within the analysis shows nine analysts have pared back earnings estimates for the forthcoming reporting period. Block is scheduled to report earnings in nine days on February 26.
Alongside the analyst update, the company has announced several operational developments. Block recently surpassed $200 billion in cumulative lending across Cash App Borrow, Afterpay, and Square Loans, a milestone the company attributes to its proprietary underwriting approach. That underwriting leverages near real-time behavioral data, which Block says enables roughly 38% more loan approvals at comparable loss rates versus more traditional underwriting methods.
Product enhancements were also highlighted: Block introduced an upgraded Square Register point-of-sale system that the company says runs 40% faster thanks to a stronger processor and expanded memory. On the leadership front, Chief Accounting Officer Ajmere Dale is set to step down in February, with Amrita Ahuja appointed as Interim Principal Accounting Officer while the company conducts a search for a permanent successor.
Other analyst activity referenced in the update included Morgan Stanley, which retained an Equalweight rating and a $72 price target on Block while trimming its fourth-quarter Square Seller GPV growth forecast to 10.3% year-over-year. The Cantor Fitzgerald note also referenced the firm's own initiation of coverage at an Overweight rating with an $87 target at the time, noting the company’s turnaround work and new product initiatives.
Context and implications
The adjustment in Cantor Fitzgerald’s model and price target highlights two concurrent dynamics affecting Block’s near-term outlook: a directionally weaker expectation for Seller GPV growth into the fourth quarter and a broader pullback in market valuation multiples across payment companies. Despite those headwinds, the firm retained its Overweight stance and did not alter its 2027 EPS projection.
Block’s reported operational milestones - accelerated point-of-sale hardware and a lending portfolio exceeding $200 billion - underscore product and underwriting momentum even as transaction volumes face short-term pressures.
Key points
- Cantor Fitzgerald cut its Block price target to $70 from $87 but kept an Overweight rating.
- The firm reduced its Seller GPV growth estimate to about 10.0% after management commentary signaled a sequential Q4 deceleration linked to weather and tough holiday comps.
- Valuation change driven by compressed market multiples; new target based on 14x 2027 EPS of $4.46 plus a DCF, equally weighted.
Sectors impacted: Payments, Financial Technology, Consumer Lending.
Risks and uncertainties
- Near-term GPV deceleration: Adverse weather and a difficult holiday comparison may reduce transaction volumes, affecting payments revenue and merchant processing trends in the fintech sector.
- Valuation pressure: Compression of market multiples across payment companies could limit upside in equity valuations even if fundamentals stabilize.
- Leadership transition: The upcoming change in the accounting leadership team creates short-term organizational risk while a permanent replacement is sought.
These risks touch firms in the payments and lending markets, and may influence investor sentiment ahead of Block's upcoming quarterly report.