UBS downgraded Klarna from Buy to Neutral on August 24, 2026. The bank reduced its price target for the company from $23.00 to $16.00.
Klarna recently lowered its full-year 2026 guidance for gross merchandise value and revenue. These revised projections overshadowed the company's return to profitability during the second quarter.
Management attributed the outlook to soft consumer spending in Europe, specifically within Germany. Foreign exchange headwinds also negatively impacted the forecast.
Klarna's stock price fell significantly during the week preceding the downgrade. The departures of the long-time Chief Financial Officer and Chief Marketing Officer also contributed to the cautious outlook.