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Investing.com -- JPMorgan expects 2026 to mark a reset for payments and fintech stocks after what it calls the sector’s worst year in 15 years, excluding the COVID shock.
In a note, the bank says it is “happy to flush 2025,” arguing that slower growth and fears of “commoditization and uncertain ROI” weighed heavily on sentiment.
For 2026, JPMorgan says it is “going back to basics,” favouring companies with pricing power, strong incremental margins and solid front-book momentum.
According to analyst Tien-tsin Huang, the names that score highest under this framework include Visa, Toast, CPAY and XYZ, while the firm plans to “steer clear of turnarounds” such as FISV and PayPal.
Both are downgraded to Neutral, with JPMorgan saying it is “too late to sell and too early to buy.”
Visa is JPMorgan’s “top overall pick,” with the firm noting that the company “checks all the boxes” for its preferred setup.
It highlights Visa’s “reasonable FY26 guidance,” upside from tokenisation pricing and the idea that tokenisation is “foundational to agentic commerce,” potentially boosting sentiment around Visa’s role in AI-enabled payments.
Despite this, the firm notes that Visa shares trade near a “10-year valuation floor relative to S&P 500.”
Toast also earns an upgrade to Overweight. “We’ve been eagerly waiting for the right time to take a seat at the Toast table,” JPMorgan writes, citing the stock’s 6% year-to-date decline despite estimates rising 27%.
The bank believes Toast can sustain “top decile growth” as a “bonafide software-led payments leader” and points to its Rule of 54% for 2026.
JPMorgan also flags two thematic wild cards. These are durable upside in lending for names like XYZ, CHYM and KLAR, and potential AI-driven optimism from agentic commerce, best played, it argues, through Mastercard and Visa.