Affirm Rallies 6% on $104 Price Target From BofA, Sezzle Climbs 4%, PayPal Rises 3%

Affirm Rallies 6% on $104 Price Target From BofA, Sezzle Climbs 4%, PayPal Rises 3%

David Moadel

Wed, September 2, 2026 at 6:45 PM GMT+3 6 min read

Quick Read

• Affirm surged 6% and Sezzle gained 4% as Treasury yields retreated and BofA raised its Affirm price target to $104 from $93.

• BofA's O'Neill treats Affirm's $64 billion GMV guide as a conservative floor, flagging a bank charter and UK expansion as unmodeled upside.

• Affirm's fiscal Q4 posted GMV up 36% to $14.1 billion and adjusted EPS of $4.62 versus $3.77 expected, its most profitable quarter on record.

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Installment-lending stocks are running well ahead of the broad market at midday Wednesday as Treasury yields retreat and a fresh price-target raise on the group's largest name pulls peers along with it. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is up 0.5% to $765.19, a modest gain that makes the buy-now-pay-later sector's move stand out.

Affirm Holdings (NASDAQ:AFRM) stock is up 6% to $73.82, leading the group after a Bank of America (NYSE:BAC) price target raise landed late Tuesday afternoon while shares were still slipping on rates. Also higher, Sezzle (NASDAQ:SEZL) stock is up 4% to $119, bouncing off a low base after a bruising month.

PayPal Holdings (NASDAQ:PYPL) stock is up 3% to $54.14, riding the same rate backdrop. Meanwhile, Klarna (NYSE:KLAR) stock is up 2% to $14.47, rounding out the sympathy bid across the group.

Bank of America Lifts Affirm Target to $104

The catalyst came from Bank of America analyst Matthew O'Neill, who raised his 12-month price target on Affirm to $104 from $93 and kept a Buy rating. O'Neill treats Affirm's own fiscal 2027 outlook as a conservative floor, pointing to guidance for more than $64 billion in gross merchandise volume, at least 27% growth from $50.2 billion in fiscal 2026.

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O'Neill also flagged drivers sitting entirely outside guidance, including a possible bank charter, a business-to-business payments push, long-duration lending in the United Kingdom, and brand-sponsored promotions. His $104 target applies a 10x multiple to forward revenue less transaction costs, which gives the setup a specific analytical hook.

The price target raise slots into a rising cluster of Street estimates. BMO Capital moved to $101 from $86, J.P. Morgan to $105 from $90, Needham to $100, RBC Capital to $96, and Citigroup sits at $115. That range makes the current print at $74 look inexpensive relative to consensus if Affirm executes on its fiscal 2027 plan, and it explains why one analyst call could carry a 6% move on a rates-friendly day.

Why Affirm Is Outrunning Its Peers

Sezzle, PayPal, and Klarna are trading up on the rate backdrop alone, since each funds receivables and benefits when yields fall or duration risk quiets down. Affirm carries that same tailwind plus a fresh target raise from a firm arguing management's own guidance understates the underlying business. That's the reason today's leader is outrunning its own group by a wide margin.

Affirm's fiscal fourth-quarter earnings report on August 27 gave the setup its foundation. The company posted gross merchandise volume of $14.1 billion, up 36%, and its revenue of $1.17 billion beat the $1.11 billion expected. Adjusted earnings came in at $4.62 per share versus $3.77 expected, and revenue less transaction costs rose 39% to $589 million, capping the company's most profitable quarter on record.

Sezzle stock had fallen 26% over the past month through Tuesday's close, so part of today's move reflects a bounce from a lower base rather than the same repricing that lifts Affirm. Affirm stock itself was down 2% over the past month heading into Wednesday, meaning today's rally recovers a portion of that drag.

What to Watch Next

Affirm CEO Max Levchin told CNBC's Squawk Box the day after earnings that "the U.S. consumer undoubtedly sees the higher gas prices, so can't, can't ignore that," and that "in times of inflation, we see more demand because folks are budgeting." The national average for regular gasoline was $4.09 a gallon on August 28.

Rising installment demand can reflect disciplined household budgeting or genuine strain, and Affirm's credit quality over the next few quarters is what separates the two readings. Investors can watch for whether Affirm's approval rates and 30-plus day delinquency ticks stay in check as Pay-in-X mix keeps growing. The bank credit-card delinquency rate sat at 2.85% as of April, inside the normalizing range rather than stress territory.

Traders may want to check for whether the broader group holds its bid through the close and into upcoming macro prints. Your position sizing here should reflect both the single-name analyst catalyst on Affirm and the group's shared rate exposure across Sezzle, PayPal, and Klarna.

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