Rekeep - comment

Moody’s Ratings has revised the outlook on Rekeep S.p.A. to negative from stable, citing expectations of weaker operating performance over the next 12 months. Moody’s anticipates that softer earnings will translate into elevated financial leverage and negative free cash flow.

The outlook change is primarily driven by challenging Italian contract renewals, which are expected to pressure margins due to limited organic growth and weaker absorption of fixed costs. Moody’s forecasts negative free cash flow of approximately €5m in 2026.

Our forecasts are modestly more constructive, with FY26 free cash flow of c.€6m, reflecting an expectation of a gradual recovery in the Italian market. In addition, there remains positive event risk from potential asset disposals, which could materially reduce leverage.

At 88% (c.14% yield) and with no near-term liquidity concerns, we continue to view Rekeep’s bonds as attractive.