President Capital Management Downgrades Klarna Group to Neutral From Buy, Adjusts PT to $16.30 From $23

Klarna (KLAR) stock has fallen 51% year-to-date, trading near its 52-week low. While peers like Sezzle (SEZL) and Affirm (AFRM) have seen mixed performance, Klarna's decline appears company-specific. Q2 showed improved margins and profitability, but guidance cuts and accounting changes raise concerns. Investors await Q3 results and holiday season performance for clarity.

Loop Capital initiated coverage of Klarna Group with a Hold rating and a $18 price target. The company's stock is currently trading at $13.96, down 51.69% year-to-date. President Capital Management also downgraded Klarna to Neutral, adjusting its price target to $16.30 from $23.

Klarna (NYSE: KLAR) reported Q2 earnings with revenue up 27% YoY to $1.042B, beating estimates. Net income turned positive at $9M, and EPS beat by $0.06. However, 2026 guidance missed expectations, citing weak German consumer spending. Analysts cut price targets despite strong operational metrics. Shares fell 2.2%.

Affirm (AFRM) rose 6% after BofA raised its price target to $104, citing strong GMV growth and potential upside. Sezzle (SEZL) and PayPal (PYPL) also gained, with Affirm's Q4 earnings beating expectations. Treasury yields retreated, benefiting installment-lending stocks.

Klarna Group plc (NYSE: KLAR) shares fell over 30% in a week, the worst since its IPO, despite beating Q2 revenue and earnings expectations. The drop followed a reduced 2026 revenue outlook, citing lower consumer spending and FX effects. The stock is down over 50% year-to-date. Hedge funds slightly reduced positions before the report. Investors weigh operational improvements against lowered guidance.

Klarna's shares rose 1.21% to $14.20 after CEO Sebastian Siemiatkowski bought 692,506 shares for $9.9M. Q2 revenue grew 27% to $1.042B, with adjusted operating income at $91M. The company revised 2026 revenue guidance down due to slower retail demand in Germany.