JP Morgan's 2026 outlook for the payment industry: Downplaying the financial services of FISV.US and PayPal(PYPL.US), betting on the growth potential of Toast(TOST.US)

Looking forward to the prospects of the payment industry in 2026, JPMorgan Chase has downgraded the ratings of Fiserv (FISV.US) and PayPal (PYPL.US) from "Overweight" to "Neutral", believing that it is now "too late to sell and too early to buy." In the research report, the bank stated, "We are happy to bid farewell to 2025 - the payment sector has recorded its worst performance in 15 years excluding the impact of the COVID-19 pandemic. Market growth slowdown has raised concerns about industry commoditization, and there is uncertainty in the return on investment for new products like loans." Regarding Fiserv and PayPal, JPMorgan Chase pointed out, "2026 is a year that requires proving execution with performance, as well as increasing investments in new initiatives and technologies. Therefore, in the coming year, there are many possible positives, as well as several potential disappointments." The report further stated, "Based on this, we are more inclined to take a wait-and-see attitude, expecting to gather more information in the first half of 2026 to better assess whether to reposition these two stocks in the second half of the year." Meanwhile, JPMorgan Chase has upgraded the rating of Toast (TOST.US) from "Neutral" to "Overweight". The bank said, "Looking ahead to 2026, we will focus on fundamentals, prioritizing companies with pricing power, strong margin and order growth." "We have been waiting for the right time to position ourselves in Toast. Despite a 6% decline in its stock price since 2025, earnings expectations have been raised by 27%; its 'growth + profit margin' composite indicator (Rule of 54%) has been established for 2026, reaching 59% if a 38% incremental profit margin is used; in addition, if credit card interchange fee regulations are implemented, there is additional upside potential for the stock. Based on these factors, we have upgraded its rating," the report added.