Fintech Stocks Hit 15-Year Low: J.P. Morgan Warns of a Tough 2026 Ahead

J.P. Morgan has cut its ratings on fintech companies Fiserv (FISV.US) and PayPal (PYPL.US) from “Overweight” to Neutral, describing the stocks as “too late to sell and too early to buy.” The commentary, cited by Seeking Alpha, reflects deepening concerns over slowing growth in the payments industry.

According to the bank, 2025 is shaping up to be one of the sector’s worst-performing years in the past decade and a half — excluding the COVID-19 shock. The slowdown in market growth has fueled fears of service devaluation and uncertain profitability of new offerings, including lending-related products.

“Growth deceleration is pressuring valuations, and many new initiatives still lack clear visibility on return on investment,” the bank noted.

2026: A Make-or-Break Year for Payments Companies

Analysts describe 2026 as both a year of necessary execution and a period requiring renewed investment in innovation and technology. For PayPal and Fiserv, “much can go right — and many things can disappoint,” the report says.

J.P. Morgan plans to remain in a “wait-and-see” position until at least mid-2026, anticipating the first half of the year will provide crucial clarity for investors.

What Analysts Think: PayPal and Fiserv

PayPal (PYPL.US) shares have dropped nearly 28% year-to-date. Among 46 analysts tracked by MarketWatch:

• 20 recommend buying
• 22 maintain a Hold rating
• 4 advise selling

The Wall Street consensus price target stands at $82.2, implying 34% upside from the December 3 close.

Fiserv (FISV.US) has seen a steeper decline, losing 68% YTD. Of the 34 analysts covering the stock:

• 14 rate it a Buy
• 20 maintain a Neutral stance
• Only 2 recommend selling

The consensus price target is $85.7, about 28% above the latest close.

Toast Upgraded: A Bright Spot in 2026?

In contrast to the downgrades for PayPal and Fiserv, J.P. Morgan upgraded Toast (TOST.US) from Neutral to “Overweight,” calling it one of the few fintech names positioned to benefit from 2026 fundamentals.

“In 2026 we return to core fundamentals, focusing on companies capable of raising prices without losing customers while maintaining strong margins and rapidly expanding their customer base,” the analysts said.

Toast shares are down nearly 4% YTD. MarketWatch data shows:

• 19 analysts recommend buying
• 13 suggest holding
• No Sell ratings at all

The consensus price target of $47.65 implies a 35% upside from current levels.

What to Watch Going Forward

• Execution on new product roadmaps in 2026
• Margin trends amid rising investment in technology
• Pricing power and customer retention metrics
• Competitive pressures in the payments ecosystem

While large fintech platforms face a challenging reset, select players like Toast may benefit from renewed investor focus on pricing strength and operational efficiency.