Oppenheimer Still Loves Visa

In a report published Friday, Oppenheimer analysts maintained an Outperform rating on

, with a price target of $73, after the company reported robust quarterly results. Visa reported its 2QFY15 adjusted EPS at $0.63, flat y/y and in-line with expectations. EPS growth faced difficult y/y comps. Net revenue grew 8 percent y/y to $3.41B, ahead of the Oppenheimer estimate, with the beat being driven by lower-than-anticipated rebates or incentives. In the report Oppenheimer noted, "April volumes remain healthy, cross-border volumes modestly accelerated to 9% (vs. 8% in 2QFY15), US volume was stable at 9% Y/Y (vs. 9% in 2QFY15), and processed transactions decelerated slightly to 10% in April (vs. 11% in 2Q15). Account conversions added ~3pts to US credit volume growth." Visa reiterated its FY15 revenue expectation of low double-digit CC revenue growth, reflecting a currency drag of about 200bps. The company now expects EPS growth at the low end of its mid-teens growth range. The EPS estimate for FY15 has been reduced from $2.60 to $2.58, reflecting ~8 percent net revenue growth to $13.7B and margin expansion of 160bps. The EPS estimate for FY16 has been reduced from $3.00 to $2.97, reflecting ~9 percent revenue growth and margin expansion of 110bps. "We remain encouraged by continued healthy CC volume growth, revenue growth and margin performance despite accelerating FX/gasoline volume headwinds. We believe V, trading at ~22x our revised CY16E, remains highly attractive over intermediate term," the analysts added.