Visa Falls On Raymond James Downgrade

Shares of Visa V are down roughly 1 percent Thursday morning 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 writes, "...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 renegotions 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 Rissia 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 annlual EPS".

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