Last Update 10 Jan 26

Fair value Decreased 1.01%

NEXI: Future Upside Will Depend On Index Removals Resetting Expectations

Analysts have trimmed their price target on Nexi to about €3.85 from €4.75, reflecting updated views on fair value, discount rate, revenue expectations and forward P/E.

Analyst Commentary

Recent research points to a more cautious stance on Nexi, with the trimmed price target to about €3.85 from €4.75 reflecting reassessments around valuation and expected execution.

Bullish Takeaways

The new €3.85 target still implies that analysts see a defined fair value for Nexi, rather than writing the equity off entirely.
Maintaining formal coverage signals that the company remains relevant in sector comparisons on metrics such as P/E and earnings power.
The adjustment is framed through updated assumptions on revenue and discount rates, which can help reset expectations to levels analysts view as more achievable.

Bearish Takeaways

The move to a lower €3.85 target, from €4.75, points to more conservative expectations on Nexi's ability to deliver against prior revenue and earnings assumptions.
The Underweight rating highlights caution on risk or relative return compared with other payment and fintech names covered in the same sector.
The reference to discount rate and forward P/E suggests analysts are applying stricter hurdles to Nexi's cash flows and valuation multiples than before.
For investors, the combination of a reduced target and an Underweight stance underlines that, in current research views, Nexi is not a preferred idea within its peer group.

What's in the News

Nexi S.p.A. is set to be dropped from the S&P EUROPE 350 index, which can affect how index funds and benchmarked portfolios treat the stock going forward (Key Developments).
The company is also being removed from the S&P EUROPE 350 Financial Services industry group index, reducing its presence in that specific sector basket (Key Developments).
Nexi is being dropped from the S&P EUROPE 350 Financials sector index, further cutting its representation across S&P's European financial indices (Key Developments).
Outside Europe focused benchmarks, Nexi is scheduled to be removed from the S&P International 700 index, which tracks a broader set of international equities (Key Developments).
The stock is also being dropped from the S&P Global 1200 index, a widely followed global benchmark that aggregates major regional indices (Key Developments).

Valuation Changes

Fair Value: Trimmed slightly from €5.56 to €5.50, indicating a small reduction in the central value estimate used in the model.
Discount Rate: Edged up from 13.93% to 14.10%, which places slightly more emphasis on risk when discounting future cash flows.
Revenue Growth: Shifted from a 14.60% decline to a 14.63% decline, implying only a very small change in the revenue outlook used in the analysis.
Net Profit Margin: Adjusted marginally higher from 18.77% to 18.78%, suggesting a virtually unchanged profitability assumption.
Future P/E: Moved slightly lower from 12.13x to 12.06x, reflecting a minor tweak to the earnings multiple in the valuation work.

Digital payments adoption, e-commerce growth, and strategic bank partnerships are strengthening Nexi's core revenue, customer base, and long-term market position.
Synergy-driven margin improvements, reduced integration costs, and innovative digital service offerings are driving higher profitability and new growth opportunities.
Loss of key contracts, regional concentration, price pressures, and integration risks threaten margin resilience, constrain growth, and expose Nexi to increased competition and revenue volatility.

Catalysts

About Nexi

Provides electronic money and payment services to banks, small and medium-sized enterprises, large international corporations, institutions, and public administrations in Italy, Nordics and Baltics, Germany, Austria, Switzerland, Poland, Southeast Europe, and internationally.What are the underlying business or industry changes driving this perspective?

Accelerating migration from cash to digital payments continues to fuel Nexi's core transaction volumes, especially in Italy and Central Europe, supporting robust long-term revenue growth and offsetting short-term headwinds from bank contract renegotiations.
E-commerce and mobile commerce penetration remains a key growth engine for Nexi, with customer base expansion of 5% across geographies and successful cross-selling of value-added digital services, driving higher take rates and supporting net margin expansion.
Ongoing integration of recent mergers and realization of associated cost synergies-including the reduction of transformation and integration expenses-are expanding EBITDA margins and generating stronger free cash flow, positioning Nexi for enhanced future earnings.
Investments in partnerships with ISVs (integrated software vendors), innovation in digital payment solutions, and support for emerging payment methods (such as instant payments and open banking alternatives) are creating new monetization opportunities, broadening the addressable market and supporting long-term revenue and earnings growth.
Renewed and extended multi-year contracts with major banking partners, particularly in Italy, add resilience and visibility to Nexi's revenue streams, reducing downside risk and enabling continued investment in growth initiatives and shareholder returns.

Nexi Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Nexi's revenue will decrease by 13.7% annually over the next 3 years.
Analysts assume that profit margins will increase from 4.8% today to 20.1% in 3 years time.
Analysts expect earnings to reach €813.9 million (and earnings per share of €0.66) by about September 2028, up from €304.8 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting €962 million in earnings, and the most bearish expecting €529.2 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 13.6x on those 2028 earnings, down from 20.5x today. This future PE is greater than the current PE for the IT Diversified Financial industry at 11.0x.
Analysts expect the number of shares outstanding to decline by 2.86% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 13.75%, as per the Simply Wall St company report.

Nexi Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Recent loss of key bank distribution contracts in Italy and associated migration of transaction volumes away from Nexi present a structural challenge, potentially leading to ongoing revenue headwinds and increasing volatility, particularly as these impacts are expected to persist and possibly accelerate in the coming quarters.
Contract renewals with bank partners often require price concessions or discounts, and although volume growth can offset initial revenue loss, the cumulative effect of repeated renegotiations or lost contracts could compress net margins and constrain long-term earnings growth.
While the company points to robust relationships with Italian banks, there is ongoing geographic concentration risk in Southern Europe; sustained macroeconomic volatility, economic stagnation, or intensified regional competition could weaken revenue resilience and growth prospects over time.
Despite the company's strategy of cross-selling value-added services and innovation, the slow development and market adoption of integrated software payment (ISV) channels in key markets like Italy may undermine differentiation efforts, leaving Nexi more exposed to margin compression from both regulatory change (fee caps) and competitive threats (global tech entrants, local disruptors).
Heavy reliance on M&A-driven growth and integration synergies presents operational and execution risk; persistent integration costs, delayed synergy realization, and ongoing leverage from recent acquisitions could limit Nexi's capacity for organic investment and innovation, thereby restricting improvements in net earnings and shareholder value creation in the longer term.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €6.9 for Nexi based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €8.75, and the most bearish reporting a price target of just €4.5.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €4.1 billion, earnings will come to €813.9 million, and it would be trading on a PE ratio of 13.6x, assuming you use a discount rate of 13.7%.
Given the current share price of €5.24, the analyst price target of €6.9 is 24.1% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Digital Payments Momentum Will Drive Broader Transformation Across Europe