Payments winners need pricing power, tech edge in 2026, says J.P. Morgan

Block

04/12/2025 12:18

** J.P. Morgan prefers shares of payment and fintech companies with pricing power, strong incremental margins, and front book velocity for 2026

** "2026 feels like a show-me execution year and an investment year in new initiatives and tech, so a lot can go right, but a lot can disappoint too" - JPM

** AI-driven commerce may lift sentiment for payment names; best exposure is through networks like Mastercard MA.N and Visa V.N, while PayPal PYPL.O has the most to prove - JPM

** Visa V.N is brokerage's top pick for next year

** Lending is likely here to stay, and if performance holds, stocks like Block Inc XYZ.N, Chime Financial CHYM.O, and Klarna Group KLAR.N could see meaningful share gains - JPM

** JPM upgrades payments company Toast TOST.N to "overweight" from "neutral" on expectation of strong growth

** Brokerage downgrades PayPal and Fiserv FISV.O to "neutral" from "overweight", saying valuation concerns persist
** Shares of Toast rise 2.4%; PayPal down 1.1% and Fiserv marginally down premarket

 (Reporting by Kanishka Ajmera in Bengaluru)

 ((Kanishka.Ajmera@thomsonreuters.com))