Here's Why Visa Can Beat Earnings Expectations Today

Visa Inc V is scheduled to report its third quarter earnings after the market closing on Thursday. Kevin McVeigh, managing director at Macquarie Group, was on CNBC to discuss whether the company can beat earnings expectations.

Pressure Will Cool Off

"The models tend to be much different because you've got much broader acceptance across Visa, " McVeigh began. "And I think a lot of the pressure that Visa had seen earlier this year will start to abate. We spend a lot of time on the fuel dividend and how that has masked what's been pretty good core growth. Across the revenue the last 3-4 quarters you have had two to three things that have impacted the revenue negatively by about 500 basis points."

Very Constructive On The Name

"So, you've got fuel, you've got foreign exchange, you've got the issues in Russia again impacting them anywhere from 500 to 600 basis points. We think a lot of that will start to abate in the back half of this year particularly around the consumer. And American Express has had very specific challenges...Costco...that's business that Visa is going to pick up in the back half of the year. So, we're very, very constructive on the name."

FX: Source For Upside

McVeigh continued, "One other things we have highlighted is just FX volatility. [While] that's weighed on the earnings, they've been able to process some of that and actually make some incremental spread of that. So, we look for that as actually source for upside in this quarter and we look for the company to reaffirm if not talk about improving trends over the back half of the year."

McVeigh feels that if Visa is able to beat expectations this quarter, the stock can reach $78.