TD Cowen analyst Bryan Bergin labelled Block (XYZ) stock as the research firm’s “Best Idea for 2026,” citing solid momentum in its Cash App and Square apps. Bergin reiterated his Buy rating and $91 price target on XYZ, implying nearly 49% upside potential from current levels.
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Bergin believes that Block has made notable progress in 2025, which indicates a move toward greater consistency that should eventually correct the stock’s current undervaluation.
Here’s Why XYZ Is a Buy
Bergin noted that XYZ offers the most favorable risk-reward profile in his coverage of fintech and payments stocks. He highlighted that Block’s focus and urgency around Cash App and Square should deliver mid-teens gross profit growth and accelerated cash flow expansion. His estimate shows a roughly 30% earnings per share (EPS) and free cash flow (FCF) compound annual growth rates (CAGRs) through Fiscal year 2028.
In his view, Block has a clear execution plan that supports multiple expansion, even as XYZ shares trade at about 9.5x FY26 earnings before interest, taxes, depreciation, and amortization (EBITDA), which is a meaningful discount to its peer company averages of roughly -40% vs. 3-year average EV/FY2 EBITDA. Despite macro uncertainty, Bergin believes XYZ has sufficient self-help to meet fiscal 2026 to 2028 targets, reinforced by early 2025 traction.
Bergin Is Happy with Block’s Turnaround Progress
Bergin is encouraged by Block’s turnaround progress, which it began about two years ago. He added that at its November Investor Day, Block outlined a simple strategy of bigger addressable opportunities, tighter focus, stricter cost control, and momentum in Cash App and Square.
He noted that both businesses are moving faster on product development, with broader channels and targets. A deeper, integrated ecosystem should boost Neighborhoods’ network effects, pointing to a stronger, more mature earnings and cash flow profile for long-term investors. He concluded by stating that while Wall Street awaits proof, Block is already moving ahead.
Is XYZ Stock a Buy?
Analysts remain divided about Block’s long-term outlook. On TipRanks, XYZ stock has a Moderate Buy consensus rating based on 22 Buys, three Holds, and two Sell ratings. The average Block price target of $86.61 implies 41.7% upside potential from current levels. Year-to-date, XYZ shares have lost 28%.
