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Visa Inc. (V), headquartered in San Francisco, California, operates a retail electronic payments network and manages global financial services. Valued at $509.4 billion by market cap, the leading digital payments company also offers global commerce by transferring value and information among financial institutions, merchants, consumers, businesses, and government entities.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and V definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the credit services industry. Visa provides value-added services to its clients, including fraud and risk management, debit issuer processing, loyalty services, dispute management, digital services like tokenization, as well as consulting and analytics.
Despite its notable strengths, Visa slipped 3.6% from its 52-week high of $290.96, achieved on Mar. 21. Shares of Visa rose 3% over the past three months, trailing behind the Financial Select Sector SPDR Fund’s (XLF) 10.3% returns during the same time frame.
In the longer term, shares of Visa rose 7.7% on a YTD basis and climbed 13.1% over the past 52 weeks, underperforming XLF’s YTD gains of 20.9% and solid 31% returns over the last year.
However, Visa has traded above its 50-day and 100-day moving averages since August end, indicating a bullish trend.
V's performance has been impacted by declining disposable income for lower-spending consumers, leading to reduced spending on higher-priced and non-essential items. Macro headwinds, recession fears, and antitrust challenges have dampened V's outlook.
On Sep. 3, V shares closed up more than 1% after BNP Paribas upgraded the stock to “Outperform” from “Neutral” with a price target of $325.
On Jul. 24, V shares fell more than 4% after its Q3 revenue of $8.90 billion, slightly missing Wall Street estimates of $8.92 billion. Its adjusted EPS of $2.42 was in line with analysts’ expectations. V processed $3.3 trillion in transactions on its network during the quarter, up 7.4% year over year.
In the competitive arena of credit services, Mastercard Incorporated (MA) has taken the lead over Visa, showing resilience with a 13.3% uptick on a YTD basis and a solid 16.3% gain over the past 52 weeks.
Wall Street analysts are highly bullish on Visa’s prospects. The stock has a consensus “Strong Buy” rating from the 34 analysts covering it, and the mean price target of $303.84 suggests a potential upside of 8.3% from current price levels.
On the date of publication, Neha Panjwani 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.
