'Too late to sell, too early to buy': J.P. Morgan revises fintech ratings

J.P. Morgan downgraded shares of fintech services Fiserv and PayPal from Overweight to Neutral from Market Perform, explaining that these positions are "too late to sell and too early to buy," citing a note from investment bank Seeking Alpha.

"Happy to say goodbye to 2025: payment company stocks are headed for their worst performance in 15 years, not counting the COVID-19 period, as slowing market growth has raised concerns about the depreciation of services and unclear payback on new products like lending," the investment bank said in a note.

J.P. Morgan noted that 2026 "feels both like a year to prove the ability to execute on plans" and "a year of investment in new initiatives and technologies." The investment bank explains that in the new year for payment systems Fiserv and PayPal "many things can go well, but many things can also disappoint".

"Therefore, we prefer to take an observer stance and expect to understand a lot in the first half of the year to decide whether to get back in the game in the second half of the year," the note said.

According to MarketWatch, of the 46 analysts tracking PayPal shares, 20 advise buying them, 22 take a neutral (Hold) stance and four advise selling the securities, which have lost almost 28% since the beginning of the year. The Wall Street consensus price target is $82.2, up 34% from the closing price on Dec. 3.

Fiserv shares have lost 68% of their value since the beginning of the year. Out of 34 analysts tracking the stock, only 14 recommend buying it, while 20 take a neutral stance. However, only two advise selling the stock. The Wall Street consensus price target is $85.7, up 28% from the stock's closing price on Dec. 3.

In contrast, J.P. Morgan experts upgraded the stock rating of restaurant software and equipment developer Toast from Neutral to Outperform (Overweight). "In 2026, we return to the fundamentals and select companies that can raise prices without losing customers, as well as show high profitability and quickly build a base of new customers," - said analysts J.P. Morgan.

Shares of Toast have fallen nearly 4% since the beginning of the year. According to MarketWatch, 19 of 32 analysts monitoring the company's securities advise to buy and 13 advise to hold them. None of the analysts monitoring Toast are recommending selling the securities. The Wall Street consensus price target is $47.65, which is 35% above the current value.

This article was AI-translated and verified by a human editor