Goldman Sachs Reiterates Buy, Raises PT to $114 on Visa

Goldman Sachs maintains its Buy rating on Visa

and raises its price target to $114 from $110 per share as the company adds to escrow reserve for litigation. Goldman Sachs says, "With the announced deposit of $1.565 bn to its litigation reserve, put into place under its retrospective responsibility plan, the reserve is expected to finish in excess of $4 bn by the end of 1QFY12. In addition, V has now exhausted its existing stock repurchase program. With no debt, a modest dividend, and estimated FY12 FCF of $4 bn-plus, our model assumes that V will resume its buyback activity in 3QFY12 (June 2012). Consistent with our previous comments, one of the key elements underpinning our positive view on V shares is the earnings defensiveness offered by the model given its growth profile in payments and capital stewardship." V closed at $102.48 per share on Friday.