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Klarna Stock Gets First Ratings After IPO. A Lot of Analysts Say It’s a Buy.

Oct 06, 2025 12:56:00 -0400 by Mackenzie Tatananni | #Fintech

Klarna Group made its public trading debut in September. (NYSE)

Key Points

Shares of Klarna Group surged on Monday as the buy-now, pay-later service provider picked up its first ratings from analysts following its initial public offering last month.

Goldman Sachs was one of the most positive. The bank began coverage with a Buy rating and a target of $55 for the stock price, saying Klarna is “the market leader” in the buy-now, pay-later business. Shares of the Swedish fintech were up 3.7% at $42.20 on Monday.

Klarna has “a particularly strong franchise in Europe, where we believe Klarna is a new, emerging closed loop payment scheme, similar to American Express in the United States,” the analysts wrote. That means it differs from Visa and MasterCard, which handle payments for any merchant that accepts those cards.

The nod to AmEx, one of the largest credit-card providers in the U.S., parallels commentary from members of management, who told Barron’s ahead of the IPO that the company was aiming to challenge the traditional banking sector.

There is no questioning Klarna’s foothold in Europe, particularly in Sweden, where it was founded in 2005. Analysts noted that the company expanded into five additional markets by 2010, culminating in its U.K. launch in 2014. Ahead of its IPO, Klarna pushed further into the U.S. through agreements with companies such as Walmart , a big player in both online and bricks-and-mortar retailing.

“We see the US expansion taking center stage, with Klarna having recently won a number of large partnerships, comprising nearly half a trillion dollars in addressable consumer spend that we expect to propel its US market share,” the analysts wrote. The bank singled out deals with payment service providers Stripe and Ayden, saying they “increasingly promote Klarna as a default payment option for e-commerce merchants.”

Goldman is also bullish on the BNPL space as a whole. Klarna is positioned to benefit from a shift towards one-time, fixed-amount loans for everyday spending as a substitute for credit cards, the bank argued. The analysts said it is harder for less wealthy people to get consumer credit and that many are backing away from credit cards “due to the risk of amassing unsustainable levels of revolving credit card balances when experiencing financial hardship.”

While the consumer finance end market is cyclical, “through the cycle, we see Klarna as consistent share gainer over time,” the firm wrote.

J.P. Morgan analysts were similarly upbeat, beginning coverage with an Overweight rating and $50 price target. The bank called Klarna “a fintech pioneer that has grown into an international financing and commerce powerhouse.”

Klarna has a presence in 26 countries, linking more than 110 million active users to almost 800,000 merchants since its inception, J.P. Morgan said. The firm said that Klarna, one of the first companies to popularize BNPL at checkout online, is “expanding its presence in the United States while scaling into more profitable, longer duration loans.”

The stock picked up additional Buy ratings from UBS, Bofa Securities, and Deutsche Bank, while Morgan Stanley, BNP Paribas Exane, and others rated the stock at Neutral, or the equivalent. The flurry of research notes followed a quiet period that is typical after IPOs, when underwriters of the stock are barred from issuing reports for 25 days.

Klarna made its U.S. trading debut last month. Shares began trading at $52 on Sept. 11, around 30% above the offering price, though the stock slipped back for a gain of 15%. That gave the fintech a market value of around $17.4 billion. In intraday trading Monday, that number had climbed to $29.7 billion.

The company debuted to some scrutiny. Klarna said earlier this year that an increasing number of customers were defaulting on their loans, as consumer-credit losses swelled 17% in the first quarter. The fintech subsequently noted in a securities filing that it had “a recent history of incurring losses and may not be successful in effectively balancing growth and profitability in the future.”

Then there are questions about competition. Affirm Holdings is a notable rival in the BNPL space, but Klarna is set to displace Affirm as Walmart’s exclusive BNPL provider by the end of the year.

J.P. Morgan analysts themselves referred to Affirm as Klarna’s primary peer, noting that Klarna trades at a “healthy discount” to Affirm. While there is “an attractive longer-term opportunity to close the gap over time,” analysts said, that may require “multiple quarters of solid execution.”

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com