European payment stocks may be approaching a turning point in 2026, after several years of profit downgrades and pressure on valuations, according to Jefferies.

The sector is now "ready for acceleration" as base effects diminish and fundamentals reaffirm, analysts Hannes Leitner and Charles Brennan said in a note on outlooks for 2026.

"A combination of base effects, growing customer momentum, and undemanding valuation results in an attractive entry point, in our opinion," the analysts wrote.

They note that 2025 was marked by negative profit revisions and multiple compression, driven by company-specific issues such as fees and regulation, as well as currency headwinds due to the strengthening of the euro and the British pound.

In this context, Jefferies expects 2026 to mark a reversal in trends for much of the sector.

The team remains cautious about the pace of structural change from new technologies, arguing that while "stablecoin and agent commerce are here to stay," adoption is likely to be "slow and volatile," making 2026 a year when investors "will return to fundamentals."

However, progress in infrastructure will be closely monitored, the analysts added.

In terms of stock recommendations, among large-cap names, Jefferies prefers Adyen and Wise, highlighting revenue growth acceleration as the main investment argument.$BNB