BofA Securities lowers Klarna stock price target to $46 on credit growth concerns

Compass Point has lowered its stock price target for Klarna to $48, attributing this decision to a reduction in transaction margins. This adjustment reflects a negative outlook on the company's financial performance as analysts express concerns regarding its profitability.

Klarna has secured a $6.5 billion loan deal with Elliott funds to enhance its operations in the US market. This strategic move aims to bolster Klarna's financial position and support its growth initiatives as it continues to expand its presence in the competitive buy-now, pay-later sector. The partnership with Elliott funds is expected to provide Klarna with the necessary capital to invest in technology and marketing efforts.

Klarna has reported third-quarter revenue that exceeded expectations, showcasing a positive financial performance. The company attributed this success to its effective business strategies and strong market position. Klarna's outlook remains above consensus, indicating confidence in its future growth prospects.

Klarna reported a significant increase in sales during its first quarterly report as a publicly traded company. However, the buy-now, pay-later firm also experienced a loss due to rising expenses. This mixed financial performance highlights the challenges faced by the company in balancing growth with cost management in a competitive market.