Analyst Martinez argues Block has meaningful earnings-power upside and a substantial de-rating in valuation, implying around 20% upside potential.

HSBC notes healthy gross profit growth and margin expansion, alongside a material de-rating of Block’s stock over the past year, creating an attractive risk-reward profile while warning of risks from rapid lending activity growth.

The piece highlights a broad chorus of analyst reactions and updated 2026 guidance from several firms following Block’s earnings and the workforce cuts.

Block Inc. received a flurry of upgrades and higher target prices after its Q4 2025 results, with HSBC moving the stock to Buy and lifting the price target to $77 from $70 on stronger earnings power following substantial workforce reductions.

Analysts at Cantor Fitzgerald, UBS, Truist, RBC Capital, Bernstein, and SocGen reacted with upgraded targets and ratings, noting AI-driven restructuring and an improved 2026 outlook that underpins higher price targets, including a $78 Overweight from Cantor Fitzgerald and $90 Buy from UBS and RBC, among others.

HSBC’s Saul Martinez raised Block’s earnings estimates and adjusted the price target to $77, highlighting the Q4 results as a catalyst for the upgrade.

HSBC projects roughly 20% higher 2026 adjusted operating earnings and about 16% higher adjusted EPS, with the full impact of the headcount reductions unlikely to show until the second half of 2026.

About 60% of Block’s 2026 adjusted operating earnings are expected to be generated in the second half, suggesting 2027 consensus estimates may be too low.

Block’s Q4 results beat on gross profit by about 5% and included a workforce reduction of roughly 40%; brokerage houses responded with mixed reactions and targets.

Projected 2026 adjusted EPS is $3.41, up from $2.10 in the last-twelve-month period, with 2026 guidance staying aligned to company expectations.

Several banks peg 2026 adjusted operating earnings up about 20% and adjusted EPS up around 16%, in line with Block’s guidance.

Block stock sits around $64.45, down about 22% from a year high but up roughly 26% over the past week.