Looking ahead to the 2026 payments industry landscape, JPMorgan has downgraded FISERV INC (FISV.US) and PayPal (PYPL.US) from "Overweight" to "Neutral," stating that it is currently "too late to sell, too early to buy." The bank noted in its research report: "We are ready to bid farewell to 2025—payment stocks are posting their worst performance in 15 years, excluding the pandemic period. Slowing market growth has raised concerns about industry commoditization, while the return on investment for new products like lending remains uncertain."
Regarding FISERV and PayPal, JPMorgan highlighted: "2026 will be a year where execution must be proven, as well as a year of increased investment in new initiatives and technology. As a result, the coming year could bring both upside potential and disappointing outcomes." The report added: "Given this, we prefer a wait-and-see approach, expecting to gather more information in the first half of 2026 to better assess whether to reposition in these stocks in the second half."
Meanwhile, JPMorgan upgraded Toast, Inc. (TOST.US) from "Neutral" to "Overweight." The bank stated: "Looking toward 2026, we are refocusing on fundamentals, prioritizing companies with pricing power, strong margins, and order growth."
"We have been waiting for the right time to invest in Toast. Despite a 6% stock decline in 2025, earnings expectations have risen by 27%. Its 'growth + margin' composite metric (Rule of 54%) is already established for 2026, and applying a 38% incremental margin would push this figure to 59%. Additionally, potential regulatory changes in credit card interchange fees could provide further upside. Based on these factors, we are upgrading the stock," the report concluded.
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