Visa Europe Synergies Are Worth $7 Per Share, Give Stock Upside: Bernstein

In a report published Wednesday, Bernstein analyst Lisa D Ellis maintained an Outperform rating on

, while raising the price target from $84 to $90, based on the expected long term benefits to the company's capital and cost structure if it is successful in acquiring Visa Europe. The company is in active discussions with Visa Europe regarding the deal, the outcome of which, regardless of whether it is positive or negative, is expected by October 2015. Analyst Lisa D Ellis noted that Visa is poised to register significant benefits if it successfully acquires Visa Europe. The expected deal price is around $20 billion, Ellis mentioned. In the report, the analyst noted that a successful acquisition should result in two primary sources of incremental value in a "united Visa" - first a more efficient capital structure and additional long term margin expansion opportunity, driven by the slowing down of Visa Inc's expense growth. "Despite a 13% run-up in Visa YTD, we continue to see upside in the stock, on both strong fundamentals and increasing probability of Visa Europe," the report added.