Visa Rises as Wall Street Likes Its Post-Investor Day Potential
Visa Rises as Wall Street Likes Its Post-Investor Day Potential
(Bloomberg) -- Visa Inc. gained as much as 2.1%, the most since mid-January, after hosting its first investor day in three years on Tuesday. Analysts pointed to strong growth trends and new ways to boost consumer payment flows.
Here’s a sample of the latest commentary:
Morgan Stanley, James Faucette
The investor day “should help quell concerns from potential investors over disruption risk, as Visa showed its integral role in perpetuating industry growth, including for fintechs, banks and acquirers,” Faucette wrote in a note.
“The consumer payments runway looks robust,” he added, with long-term “opportunity to monetize other payment flows.” Visa has also “cemented its position as a key promoter of faster digital payments by highlighting its work with transit systems, remittance companies.” At the same time, Faucette said there may be some “noise” ahead from foreign exchange and volumes growth in China. He rates the stock overweight with a price target of $240.
Bernstein, Harshita Rawat
In comparison to Visa’s last investor day three years ago, there was an “immense focus on, granularity of strategy and visible progress towards the next leg of growth – expansion into new flows,” Rawat wrote in a note.
She added that Visa “hammered home the secular growth opportunity in consumer-to-business payments with interesting spotlights on battleground areas such as emerging markets (e.g., India) and cash-heavy developed markets (e.g., Germany, Japan).” And contactless and e-commerce remain “powerful catalysts for cash digitization,” she said.
Bernstein remains bullish on Visa and believes the “investor day will start to change the narrative on slower growth versus Mastercard.”
KBW, Sanjay Sakhrani
“The company did a solid job making the case that the growth story remains strong and the future is as bright as the past,” Sakhrani wrote in a note. The steps Visa is taking to be “more accessible (via partnerships), robust (via the network of network strategy) and deeper (through value-added services) is a formula that will yield significant returns,” he added.
Sakhrani still sees Visa as a “compelling long-term growth story” and reiterated his outperform rating and $245 price target.
Nomura Instinet, Bill Carcache
Carcache believes Visa’s “three-pronged strategy positions it to sustain double-digit revenue growth and mid-teens EPS growth for years to come.”
At the same time, he added that the company’s investments are likely to keep expense growth elevated in the near-term. He reiterated his buy rating on the shares.
UBS, Eric Wasserstrom
“The central theme of Visa’s investor day was that, by virtue of its pivot to become a network-of-networks, it is evolving from a consumer payments company to a broader money movement ecosystem,” Wasserstrom wrote.
That pivot may extend Visa’s “relevance into several new payment flows – opening significant new TAM – and the financial implication is that Visa should sustain low double digit revenue growth longer term,” he said. The investor day affirmed Wasserstrom’s “focus on the opportunities from new flows,” but didn’t alter his current financial forecasts.
To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Steven Fromm, Scott Schnipper
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