Wolfe Research downgraded Klarna from Outperform to Peerperform on Monday, citing near-term visibility concerns despite the buy-side firm’s constructive view on the fintech’s strategic initiatives.
The downgrade comes as Klarna faces investor caution following a reduction in its full-year gross merchandise volume (GMV) forecast to $150 billion, down from an earlier projection above $155 billion. Additional factors include the pending transition of its chief financial officer and a fair value accounting adjustment that introduces volatility into financial models, according to Wolfe Research.
The analyst maintained a constructive stance on Klarna’s execution, highlighting progress in the rollout of the Klarna Card, partnerships with payment service providers, and merchant wins such as the Apple Upgrade program. However, Wolfe Research characterized Klarna as a "show-me story," requiring sustained performance to validate its business model.
Klarna’s shares traded 51% lower year-to-date at $14.11 on Monday, near a 52-week low of $12.06, and fell 6.3% over the past week. The company reported second-quarter 2026 earnings per share of $0.01, beating TD Cowen’s estimate of negative $0.03 and the consensus forecast of negative $0.05.
Other analysts also adjusted their assessments. BMO Capital cut its price target to $15 while maintaining a Market Perform rating, while UBS downgraded Klarna from Buy to Neutral and reduced its target to $16. TD Cowen lowered its target to $18 from $19 but kept a Hold rating, and Needham reiterated a Hold rating.
Needham noted Klarna exceeded revenue and earnings estimates, attributing the beat partly to strong U.S. growth and the sale of back book receivables. InvestingPro data also suggests expectations for profitability this year. Separately, Affirm Holdings Inc reported elevated early-stage delinquencies in its asset-backed securities, with 30–59 day delinquencies reaching record highs for the newest vintages, according to BTIG Research.
