Block's Growth Quality, Durability Continue to Improve, BofA Says

12:40 PM EST, 11/04/2026 (MT Newswires) -- Block's (XYZ) growth quality and durability continue to improve, with Square's gross payment volume and gross profit accelerating and supporting stronger underlying seller activity, while Cash App's primary banking activities "remain the softer point," BofA Securities said Wednesday in a note. Block expects to deliver more than 15% gross profit growth and a 32% adjusted operating income margin in 2027, even without a recovery in primary banking activities, offering more visibility into sustained growth and operating leverage, according to the note. The note said 2027 is expected to be the third year of gross payment volume reacceleration. The guidance does not factor in a recovery in primary banking activities or contributions from newer initiatives, including Neighborhoods, Builder Lab, SquareMates, or Cash App Score, which could provide potential upside, the note added. Management expects initial AI revenue in Q4, with the Builder Lab event on Nov. 10 providing the next product update, according to the note. The brokerage said it sees AI as incremental optionality rather than a significant contributor in the current outlook. BofA kept a buy rating on Block and raised its price target to $117 from $115. Shares of Block rose 15% in Wednesday trading. Price: 88.40, Change: +12.40, Percent Change: +16.32