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Visa Falls On Raymond James Downgrade

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Shares of Visa (NYSE: V) are down roughly one percent Thursday following a Raymond James downgrade from Outperform to Market Perform. The price target was cut to $213 from $235.

Regarding a business catalyst in light of share buybacks, $6 billion in annual free cash flow and dividend payouts, analyst Wayne Johnson wrote, "...we also believe there is a lack of a meaningfully positive business catalyst which may suppress Visa’s stock performance for the next year or so".

Johnson expects sideways trading over the coming 12 months as Visa continues to address:

  1. Lower cross-border volume "...could have a $0.05-0.09 negative impact on annual EPS."
  2. Depressed domestic consumer spending patterns leads Johnson model to indicate "...every 100 bp of gross dollar volume growth could be a $0.04-0.05 headwind to annual EPS."
  3. Pending deal renegotiations with less favorable pricing "could be a $0.23-0.27 headwind to annual EPS vs. our model of 18% for FY15."
  4. Loss of processing revenue in Russia could have a " potential negative impact on annual EPS could be approximately $0.03."
  5. Lower fixed pricing per transaction stemming from new Chase deal - "we note that every 100 bp fluctuation in pricing growth has a $0.04 impact on annual EPS"
  6. Decelerating CyberSource transaction growth "could be a $0.02 headwind to annual EPS."

Visa currently trades at 21x Raymond James FY2015 EPS estimate of $10.23.

Latest Ratings for V

DateFirmActionFromTo
Jan 2015CitigroupMaintainsBuy
Jan 2015FBR CapitalDowngradesOutperformMarket Perform
Jan 2015Stifel NicolausMaintainsBuy

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Posted-In: Raymond James Wayne JohnsonAnalyst Color Downgrades Price Target Analyst Ratings

 

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