Jefferies said Visa Inc V’s first quarter under new CEO Al Kelly was the strongest in awhile. Investors too seem to agree as the shares climbed about 5 percent in the Friday's pre-market hours to touch a new 52-week high of $86.38.
The timing of incentives and opex drove a 10 percent EPS beat, with all key metrics including payment volumes, transactions and cross-border spending trended positively.
In addition, Visa weathered forex headwinds to deliver 25.1 percent growth in its first-quarter revenue as it benefited from strong underlying volume growth trends, accelerating cross-border spending and lower incentives.
Analyst's Commentary
“Visa also ticked up F17 const-curr. guidance, and remains on track for Visa Europe accretion targets this year, despite slight integration delays. Maintain Buy,” analyst Jason Kupferberg wrote in a note.
Although F 2017 net revenue growth guidance remains at 16–18 percent in reported terms, Visa now expects 2.0–2.5 percent of FX headwinds (vs. 1.0–1.5 percent, prior). However, Visa still sees mid-teens reported EPS growth in F 2017, even as anticipated FX headwinds increased.
Looking ahead, Visa expects cross-border growth trends could moderate slightly from first quarter levels due to further strengthening of the dollar. Also, Visa's recent debit routing rule changes (announced in November) is expected to have only very little impact on the business.
Shares of Visa closed Thursday’s trading at $82.30, while Kupferberg has a price target of $93. At last check, shares were up 4.39 percent at $85.91.
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