J.P. Morgan downgraded Fiserv (FISV) and PayPal (PYPL) (PYPL:CA) to Neutral from Overweight, citing a “too late to sell and too early to buy” view.
“Happy to flush 2025, with payment stocks on track to post their worst performance in 15-years sans COVID, as slower market growth ushered in fears of commoditization and uncertain ROI in new products like lending,” said the investment bank in a research note.
For FISV and PYPL, the investment bank said, “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.”
“As such, we prefer a fresh sideline view and expect to learn a lot in 1H to better decide if we want to get back in the game in 2H,” said the research note.
Meanwhile, J.P. Morgan upgraded Toast (TOST) to Overweight from Neutral.
“For 2026, we’re going back to basics to prefer names with pricing power, strong incremental margins, and front book velocity,” said the investment bank.
“We’ve been eagerly waiting for the right time to take a seat at the Toast table, and with shares down 6% YTD despite estimates up 27%, and Rule of 54% in place for 2026 (or Rule of 59% if you use incremental margin of 38%), plus upside potential if interchange gets regulated, we upgrade shares,” said the research note.