Klarna price target lowered to $23 from $39 at Morgan Stanley

Morgan Stanley analyst James Faucette lowered the firm’s price target on Klarna (KLAR) to $23 from $39 and keeps an Equal Weight rating on the shares. Investors have begun looking at Klarna given a widening discount to Affirm (AFRM) and secular BNPL tailwinds, but to convert them, Klarna “needs to string together a few quarters of clean U.S. Fair Financing execution,” the analyst argues. However, the firm believes it will be challenging for Klarna’s recent underperformance to substantially revert either on or following the print, noting that 335.5M shares will become unlocked and freely tradeable after the lock-up period expires on March 9.