KLAR Stock Posts Worst Week Ever: Here’s Why Wall Street Is Slashing Price Targets On BNPL Firm

Last week, UBS analyst Timothy Chiodo downgraded Klarna to ‘Neutral' from ‘Buy’ with a price target of $16, down from $23, as per TheFly.

• The firm said that the downward revision of the company’s gross merchandise value for the second half of 2026 suggests a meaningful downtick in international growth expectations, particularly in Germany. 
• Keefe Bruyette also lowered the firm's price target on Klarna to $21 from $26 and maintained an ‘Outperform’ rating on the shares.
• Last week, Klarna slashed its full-year 2026 GMV guidance to between $149 billion and $151 billion, down from its previous forecast of more than $155 billion. 

Shares of Klarna Group plc (KLAR) dropped about 31% last week, posting their worst weekly decline since debuting on stock markets last year. 

The selloff followed the company’s second-quarter earnings results that beat Wall Street expectations. However, its lowered outlook weighed on investor sentiment. 

Why Wall Street Is Turning Cautious On KLAR Stock

Last week, UBS analyst Timothy Chiodo downgraded Klarna to ‘Neutral' from ‘Buy’ with a price target of $16, down from $23, as per The Fly. The revised target still implies an upside of more than 11% on the company’s shares. 

The firm said that while it continues to see numerous positives for Klarna, including a new distribution partnership with Apple and a ramping card program, the downward revision of its gross merchandise value (GMV) for the second half of 2026 suggests a meaningful downtick in international growth expectations, particularly in Germany. 

The firm also noted management transition as a concern, citing that its long-time chief financial officer and chief marketing officer are departing over the coming quarters, which is also likely to impact the company. 

Keefe Bruyette also lowered the firm's price target on Klarna to $21 from $26 and maintained an ‘Outperform’ rating on the shares.

Klarna’s Lowered Guidance

Last week, the buy now, pay later firm posted second-quarter earnings results, with revenue surging 27% to $1.04 billion and beating Wall Street’s estimates, while earnings of $0.01 per share also beat expectations. 

However, Klarna slashed its full-year 2026 GMV guidance to between $149 billion and $151 billion, down from its previous forecast of more than $155 billion. 

The firm noted a currency movement of about $600 million for the reduction, affecting volumes across Europe, the U.K. and other markets. The company also took a weary stance on European volumes for the second half of the year, especially in Germany, its largest market by volume. Klarna said that weakness has been most pronounced in certain discretionary retail categories. 

KLAR Stock: Retail Stance

On Stocktwits, retail sentiment around KLAR stock was ‘extremely bullish’ at the time of writing amid ‘extremely high’ message volumes. 

One bullish user said, “$KLAR Easy buy and hold.”

Another user said, “$KLAR is a $25 stock. Just a matter of when, not if.”

KLAR stock is down nearly 50% in 2026. 

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