Summary
Bank of America has downgraded Nexi to Neutral from Buy following the payments group's weak fourth-quarter performance and a recent strategy presentation that outlines a more gradual revenue recovery and elevated investment plans. The bank questioned the company’s ability to return to mid-single-digit revenue growth by 2028 and trimmed near- and medium-term forecasts across revenue, adjusted EPS and free cash flow.
What prompted the downgrade
Analysts at Bank of America noted that Nexi’s own guidance points to a slow revenue path, with management projecting roughly 2% top-line growth in 2025 before a later acceleration toward the 2028 target. BofA’s modeling instead implies slower expansion, estimating growth nearer to 3.4% by 2028, and concluded that the company’s 2028 mid-single-digit revenue goal looks hard to attain.
Competitive and execution risks cited
- Bank of America highlighted the potential difficulty of rolling out new merchant services products and the risk of losing ground to newer payment competitors within Nexi’s primary markets.
- The bank also pointed to a softer industry backdrop: Nexi now expects card transaction values in its markets to grow at an annual rate of 5% to 6% between 2026 and 2030, a downgrade from roughly 10% growth projected for 2022 to 2026.
Margins and cost trajectory
Bank of America anticipates additional margin pressure as Nexi boosts spending. The company outlined operating cost growth of 5% to 6% in 2026 tied to investments in merchant services product development, the expansion of its direct sales force and enhancements to artificial intelligence capabilities. While management expects cost growth to moderate from 2027, the brokerage warned that expenses could remain elevated as Nexi continues to invest across merchant services and card issuing.
Forecast revisions and valuation
Reflecting the shifting outlook, Bank of America cut revenue estimates for 2026 through 2028 by 1% to 3%, attributing part of the downgrade to the ongoing effects of lost bank contracts. Adjusted earnings per share forecasts were lowered by 6% to 17% over 2026 to 2029. Free cash flow expectations were reduced by 8% to 17% for 2026 to 2028, a change the bank linked to higher investment spending, increased cash taxes and the removal of share buybacks.
Consequently, BofA trimmed its price target on Nexi to 03.1 from 05.1, saying the stock’s valuation leaves limited upside given execution risks and the slower growth profile.
Implications
The downgrade underscores investor concerns about a payments firm that is increasing spending to pursue product and sales initiatives while facing a weaker transaction growth backdrop and competitive pressures. The combined effect in BofA’s view is lower near-term profitability and reduced free cash generation relative to prior expectations.
Note on details
This report reflects the specific disclosures and projections included in Nexi’s fourth-quarter results and strategy update as summarized by Bank of America. Where available, the bank’s revised numerical forecasts and the company’s stated expectations have been reported without additional inference.