Morgan Stanley Still Likes Visa After Meeting With Management

In a report published Monday, analysts at Morgan Stanley maintained their Overweight rating on Visa Inc V, as well as their price target of $77. The analysts expressed their optimism regarding the company's long-term prospects, while adding that core business was likely to remain "resilient" in the near term. The transition to the new CFO, Vasant Prabhu, is likely to be smooth, given that Prabhu and the previous CFO, Byron Pollitt, share many of the same philosophies. "CFO, Vasant Prabhu, believes that V has a strong moat within the payments ecosystem and that layering on user friendliness to the heart of its rails, without compromising on security, puts it in a position to be a net beneficiary of the changing technology environment," the analysts said. Although there are several new entrants to the payments domain, Visa's global branding, which signifies reliability, ubiquity and security cannot be replicated, according to Morgan Stanley. In addition, the company has implemented a revolutionary tokenization initiative, which is expected to help decrease the risk of fraud and increase data security associated with digital payments. Although a Bloomberg report suggested that Visa might be in early stages of talks to acquire Visa Europe, "[a] transaction, were it to take place, would likely take 2-4 years to fully integrate. Excess capital will continue to be returned to shareholders via programmed buybacks and a reasonable dividend, commensurate with a growth company with similar characteristics," Morgan Stanley said. The new CFO also expressed his optimism regarding opportunities in China in the long term.