JPMorgan downgraded Klarna to Neutral from Overweight and cut its price target to $18 from $22, citing a weaker second-half outlook, deteriorating European consumer spending, and planned management departures. The bank noted Klarna's second-quarter results beat expectations, with gross merchandise volume of $36.6 billion, up 18% year-over-year, and revenue up 25% on a foreign-exchange-neutral basis to $1.04 billion, while adjusted operating profit reached $91 million, well above JPMorgan's $46 million estimate. However, Klarna now expects third-quarter GMV to rise only 7% to 10%, down from JPMorgan's previous 20% forecast, and cut its full-year GMV guidance to $149 billion to $151 billion from above $155 billion, with adjusted operating profit guidance lowered to $280 million to $300 million from above $299 million. JPMorgan attributed much of the weaker outlook to softer discretionary spending in Germany, which accounted for about one-third of Klarna's GMV in 2025, and elsewhere in Europe, along with foreign-exchange headwinds. The bank also reduced its 2026 revenue estimate to $4.13 billion from $4.40 billion and its 2026 adjusted operating profit estimate to $283 million from $322 million, while for 2027 it now expects GMV growth of 14%, down from 18%, and adjusted operating profit of $402 million, compared with its previous estimate of $600 million.
Klarna Group plcWeaker European consumer spending and reduced GMV guidance indicate lower end-customer demand for Klarna's services.
JPMorgan Chase & Co