Core Viewpoint - BofA Securities initiated coverage on Klarna with a Buy rating and a price target of $51.00, highlighting its leadership in the Buy Now, Pay Later (BNPL) market [1] Group 1: Market Opportunity - BofA estimated the total addressable market for BNPL at $2.9 trillion by 2030, with significant growth potential in the U.S. [2] - Analysts noted that Klarna's expanding merchant network presents a major growth opportunity [2] Group 2: Competitive Advantages - Key competitive advantages for Klarna include solid credit performance, a favorable funding structure, and a diverse product suite [2] - The firm emphasized that Klarna's shares are trading at 8x enterprise value to projected 2026 gross profit, indicating a compelling valuation with room for upside [2]

Core Insights - The buy-now-pay-later (BNPL) industry is rapidly expanding due to shifting global spending habits towards digital transactions, highlighted by Klarna Group PLC's significant IPO raising $1.37 billion on September 10, 2025 [1] Company Overview - Klarna has emerged as the market leader in BNPL solutions, particularly strong in Europe, with notable franchises in Sweden, Germany, and the UK [2] - The company operates in 26 countries, has over 111 million active users, and more than 790,000 merchant partners, making it the most global BNPL provider [5] Market Position and Growth Potential - Klarna is being treated as a default payment method in European e-commerce, which is expected to drive network effects and higher adoption rates [3] - The company is focusing on U.S. expansion, having secured several large partnerships that represent nearly half a trillion dollars in addressable consumer spend [3] - Analysts predict durable growth in gross merchandise value (GMV) driven by Klarna's AI-enabled strategy, which is expected to enhance transaction margins and operating leverage [4] Analyst Ratings and Price Targets - Goldman Sachs initiated coverage with a Buy rating and a price target of $55 [8] - Wedbush provided an Outperform rating with a price target of $50 [8] - Keefe, Bruyette & Woods also rated it Outperform with a price target of $52 [8] Stock Performance - Klarna Group shares were trading at $41.66, reflecting a 2.38% increase, within a 52-week range of $35.60 to $57.20 [7]

Core Viewpoint - Klarna Group's stock has seen a positive response from analysts following its IPO, with a majority initiating coverage with favorable ratings, although the stock remains below its initial trading highs [1][2]. Analyst Coverage - At least 14 analysts have initiated coverage of Klarna stock, with 10 providing buy-equivalent ratings and the remainder offering neutral views [2]. - UBS analyst Timothy Chiodo set a price target of 48, indicating an 18% upside from Klarna's price at the start of trading [3]. - Wedbush Securities analyst Scott Devitt also initiated coverage with a buy rating and a price target of 50 [4][5]. - Bernstein analyst Harshita Rawat took a neutral stance with a price target of 45, noting that Klarna's U.S. business growth is crucial against competitors like Affirm [6][7]. Business Model and Market Position - Klarna operates as a global commerce enabler focused on Buy-Now-Pay-Later (BNPL) services, primarily in e-commerce, with potential for in-store expansion [4]. - The BNPL industry presents attractive unit economics, with Klarna earning an average gross profit take rate of approximately 1.1% to 1.2% of gross merchandise value [4]. - Klarna's total revenue for the year ending June 30 was reported at $3 billion, reflecting a 17% year-over-year growth, despite a net loss of $100 million, which is a 29% year-over-year improvement [9]. IPO Performance - Klarna launched its IPO on September 10, pricing shares at 40, raising $1.37 billion, with shares initially surging to 57.20 before closing at 45.82, a 14.6% gain [8]. - Following the IPO, Klarna's stock experienced volatility but has gained 15% in October, including recent trading gains [8].

Group 1 - The company in focus is a buy now pay later IPO, referred to as CLA, which is viewed positively by analysts despite a crowded market [1][2] - There is a sense of skepticism in the market, with references to a zero-sum mentality where there are clear winners and losers [4][5] - The company has a significant global footprint and has made credible promises in the past, which have been fulfilled, indicating strong management [2][3] Group 2 - Goldman Sachs has initiated a buy rating for the company, and Rothschild has also upgraded its rating, suggesting positive sentiment among analysts [4] - There is a concern regarding transparency and honesty in the industry, particularly with companies like OpenAI, which raises questions about their operations [7] - The narrative around the company includes anecdotes of past skepticism being overturned by strong performance, highlighting the potential for significant growth [8]

Core Insights - The article compiles significant research calls from Wall Street, highlighting upgrades and downgrades that could impact investor decisions. Upgrades - Deutsche Bank upgraded Mobileye (MBLY) to Buy from Hold with a price target of $19, indicating a favorable setup for the shares [2] - BofA upgraded Brinker (EAT) to Buy from Neutral with a price target of $192, up from $190, noting that full-service restaurants are better positioned due to higher incomes among older consumers [3] - Jefferies upgraded Ford (F) to Hold from Underperform with a price target of $12, up from $9, citing the potential for improved earnings as constraints on higher CO2 mix models loosen [4] - Rothschild & Co Redburn upgraded Affirm (AFRM) to Buy from Neutral with a price target of $101, up from $74, highlighting its established product set and international growth potential [5] - Morgan Stanley upgraded Micron (MU) to Overweight from Equal Weight with a price target of $220, up from $160, predicting multiple quarters of double-digit price increases that could enhance earnings power [6] Downgrades - Susquehanna downgraded Rambus (RMBS) to Neutral from Positive with a price target of $100, indicating that the best-case EPS outlook is already priced in [7] - BofA downgraded Shake Shack (SHAK) to Underperform from Neutral with a price target of $86, down from $148, due to margin pressures from competition and inflation [7] - Citi downgraded Boston Beer (SAM) to Neutral from Buy with a price target of $235, down from $255, anticipating continued challenges in the second half of 2025 [7] - Scotiabank downgraded AT&T (T) to Sector Perform from Outperform with a price target of $30.25, expecting modest revenue and EBITDA growth amid business segment weakness [7] - Scotiabank downgraded Check Point (CHPT) to Sector Perform from Outperform with a price target of $205, down from $220, expressing less optimism about the company despite a positive outlook for the U.S. software sector [7]

Core Insights - The recent uptick in US-listed initial public offerings (IPOs) includes notable companies like Klarna, StubHub, and Netskope, indicating potential optimism for the fall IPO market [1] - However, the IPO market is unlikely to return to the exuberance seen in 1999, as a prolonged slump in listings has been influenced by high interest rates, inflation, and tariff uncertainties [2] - The number of US companies listed on stock exchanges has halved since the late 1990s, with regulatory burdens often cited as a reason for this decline [3] Regulatory Impact - Research from Columbia Business School indicates that regulatory costs account for only 7.3% of the decline in IPOs, suggesting that the impact of regulations is overstated [4] - Even if all post-2000 regulatory costs were eliminated, the decline in publicly listed companies would remain largely unchanged [4] Private Funding Dynamics - The significant increase in available private funding from venture capital and private equity is a primary reason companies are choosing to stay private longer [4] - Analysts predict that private equity will outperform public markets, with Bain & Company forecasting private market assets to grow at more than twice the rate of public ones, potentially reaching $65 trillion globally by 2032 [4] - The trend of high-growth companies remaining private could limit public investors' access to gains typically reserved for venture capital and private equity investors [4]

Core Insights - A significant increase in the acceptance of Buy Now, Pay Later (BNPL) loans is observed, particularly as the holiday shopping season approaches, with 60% of surveyed participants feeling more financial stress [1][2] - Approximately 80% of shoppers who have used or considered BNPL are open to utilizing it for holiday shopping this year, indicating its mainstream adoption [2] Summary by Sections BNPL Overview - BNPL loans allow consumers to pay for purchases in installments, typically with little to no interest, no hard credit checks, and quick approval [3] - Various services such as Affirm, Klarna, Afterpay, and PayPal provide BNPL options during online checkouts, with flexibility in payment terms [4] Consumer Behavior - Younger generations, particularly Gen Z and Millennials, are the primary users of BNPL, with about 10% of each generation utilizing these loans [7] - The convenience of BNPL is appealing to consumers, especially those experiencing financial stress [8] Credit Reporting - Starting in fall 2025, FICO will include BNPL loans in credit scores, although not all providers are required to report this activity [5]

Core Insights - The recent federal government shutdown has significantly impacted the IPO market, halting the review and processing of new registration statements by the SEC [2][5] - High-profile companies like Beta Technologies and Once Upon a Farm are now unable to proceed with their IPOs, creating a backlog in the market [3][4] - Historical data suggests that prolonged shutdowns can severely disrupt IPO activity, as seen during the 2018-2019 shutdown, which led to a near halt in traditional IPOs [5][6] Impact on IPO Activity - The current shutdown has left companies with outdated financial statements, as they must update their filings if they miss the October or November windows, leading to costly delays [4] - The longer the shutdown lasts, the more likely it is to affect investor sentiment and valuation of deals once the market reopens, as external factors may influence the landscape [7] - Past experiences indicate that while shutdowns do not eliminate the IPO market, they freeze activity and create a crowded calendar upon reopening, which can complicate the fundraising process for companies [7]

Sheel Mohnot, co-founder and general partner of Better Tomorrow Ventures (BTV), has one simple answer for anyone claiming that investing in fintech has lost some of its attractiveness. “The world of finance is huge. About 20% of global GDP is financial services, and it’s still not digital enough,” he told TechCrunch. Many financial transactions are still handled manually, and Better Tomorrow Ventures — led by Mohnot (a former general partner at 500 Startups) and NerdWallet co-founder Jake Gibson — aims ...

This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. Dive Brief: California-based robo-adviser Wealthfront publicized the paperwork for its upcoming initial public offering on Monday. The timing of a government shutdown, which began at midnight Wednesday, may complicate the company’s plan to go public. During the shutdown, routine company filings with the Securities and Exchange Commission will continue, but the ag ...