Goldman Sachs has downgraded Italian payments processor Nexi from a Buy to a Neutral rating, reducing its 12-month price target to €3.50 from €6. The bank said the new target leaves the stock, which was trading at €3.42 at the time of the report, with just 2.4% upside to the revisited valuation.
Since Goldman added Nexi to its Buy List on Feb. 1, 2022, the shares have declined by roughly 75%, the bank noted, a performance that contrasts with a roughly 31% rise in the FTSE World Europe over the same timeframe.
Analyst view on growth and margins
Goldman Sachs highlighted limited visibility for growth improvement over the next 12 months, attributing the uncertain outlook to idiosyncratic headwinds tied to bank contract ramp downs that are expected to weigh on revenue. The bank also warned of margin compression driven by both weaker operating leverage and management's decision to front-load investments.
Reflecting this view, Goldman now projects mid-term revenue growth of approximately 3%, down from a prior estimate of around 5% and below Nexi's own guidance of mid-single-digit growth.
Revisions to forecasts
Goldman trimmed revenue estimates for fiscal years 2026 through 2030 by as much as 5%. Reported earnings-per-share estimates were reduced by 21% to 34 across the same period.
For FY26 specifically, Goldman projects revenue of €3.65 billion and EBITDA of €1.87 billion, implying a 51.1% EBITDA margin - roughly 202 basis points below FY25 levels on the bank's calculations. The brokerage expects operating expenses to rise about 6% year-on-year in FY26 as Nexi expands its salesforce from 800 to 1,400 employees and scales up artificial intelligence initiatives.
Goldman anticipates EBITDA growth will turn negative at -2.1% in FY26 before returning to positive growth of 2.5% in FY27 and 3.2% in FY28, based on its estimates.
Unit-level headwinds
Within Merchant Services, Goldman called out an approximate 4 percentage point drag on FY25 growth resulting from prior bank contract exits. These headwinds are expected to persist through 2026-2027 and to normalise only after 2028, according to the bank.
The Cards and Digital Payments segment faces separate pressure from the ongoing migration of the Banco BPM contract, a process Goldman expects to continue through 2027.
Capital returns and balance-sheet outlook
Nexi has committed to distributing at least €1.1 billion in dividends across FY26-2028, beginning with a €350 million dividend in FY26 that the company expects to grow at about 5% per year. Goldman models no share buybacks and forecasts an FY27 dividend yield of roughly 9%.
The bank sharply lowered its excess cash estimates, cutting them by 19% to €725 million in FY26 and by as much as 36% by FY30. Net debt is forecast to rise to €4.73 billion in FY26, up from Goldman’s prior estimate of €4.29 billion, leaving net debt/EBITDA at 2.7x on its numbers.
Valuation framework and scenario analysis
Goldman’s revised €3.50 price target is derived from an 11x EV/FCF multiple applied to FY1Q27-4Q27 figures. The bank presented a scenario analysis that shows a bull case of roughly 60% upside - implying €5.50 per share at a 13x EV/FCF multiple - and a bear case of about 40% downside to €2 per share at an 8x EV/FCF multiple. Goldman described these outcomes as representing roughly equal risks to estimates in either direction.
On an EV/EBITDA basis, Nexi’s multiple is forecast at 5.7x for FY25, compressing to 4.2x by FY28 under Goldman’s projections.
Implications for investors
The downgrade and model revisions reflect Goldman Sachs’ view of constrained near-term growth and margin pressure linked to contract dynamics and investment timing. Investors focused on payments and fintech exposure will see adjustments to revenue, margin, cash generation and capital return assumptions under Goldman’s updated framework.