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With a market cap of $491.7 billion, Visa Inc. (V) is a global payment technology company that operates VisaNet, a transaction processing network. Based in San Francisco, California, it offers a range of payment products and services, including credit, debit, and prepaid cards, along with fraud management, digital solutions, and consulting services.
Shares of the credit card giant have underperformed the broader market over the past 52 weeks. V has gained 20.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 25.2%. In 2024, V shares are up 4.1%, compared to the SPX's 10.4% gains on a YTD basis.
Zooming in further, V is also lagging behind the US Financial Services Ishares ETF's (IYG) 28.8% gains over the past 52 weeks.
Visa's underperformance could be attributed to heightened competition in the payments processing industry, concerns about regulatory scrutiny, potential impacts from shifts in consumer spending habits, and uncertainties surrounding global economic conditions. However, the stock surged nearly 1.6% on May 6 following the announcement of a strategic collaboration with J.P. Morgan Payments to revolutionize faster money movement in the US through Visa Direct.
Plus, Visa stock rose marginally on April 23 following its Q2 earnings release. It exceeded Wall Street expectations, attributed to stable consumer spending during the quarter.
For the current fiscal year, ending in September, analysts expect V's EPS to grow by 13.3% to $9.94. The company's earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.
Among the 31 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 23 “Strong Buy” ratings, four “Moderate Buys,” and four “Holds.”
This configuration is more bullish than three months before, with 20 analysts suggesting a "Strong Buy."
On May 13, Piper Sandler rated Visa "Overweight" with a price target of $322, citing strong growth potential from substantial transaction volumes and innovative service offerings.
The mean price target of $307.86 represents a premium of 14.5% to V's current levels. The Street-high price target of $335 indicates a potential upside of 24.6%.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
