Block's Cash App Borrow to Drive Earnings Growth, UBS Says

Block (XYZ) could see stronger earnings growth as Cash App Borrow drives higher monetization, engagement and customer retention, UBS Securities said. The investment firm said in a Tuesday note that it expects Borrow to contribute about mid-20% adjusted earnings-per-share growth in 2026, followed by a mid- to high-single-digit contribution in 2027 and 2028. Loan originations and fee revenue are expected to keep rising, although growth could moderate after the benefit from Borrow's expansion into more US states fades. UBS said Oregon's restrictions should have little financial effect, while legal and banking options could help Block respond if more states introduce similar rules. UBS expects gross profit growth to accelerate across both Square and Cash App in fiscal 2026, supported by sales hiring, new lending products, AI tools and stronger links between the two platforms. The firm also said slower operating expense growth, stronger payments activity, recent pricing actions and the company's conservative guidance could lead to upward estimate revisions over the coming quarters. UBS has a buy rating and a $92 price target on the stock. Shares of Block were up 3.2% in.