Klarna initiated with a Hold at Needham

Needham analyst Kyle Peterson initiated coverage of Klarna (KLAR) with a Hold rating and no price target The firm views Klarna as a global leader in the buy now pay later space and likes the company’s full banking license. However, Klarna’s expenses could rise as its initiatives to reduce headcount and replace customer service agents with artificial intelligence “seem to have reversed course,” the analyst tells investors in a research note. In addition, Needham is concerned that winning the Walmart account from Affirm (AFRM) could be an economic net negative for Klarna.