Visa Stock Now Worth At Least $80, Analysts Say

• Visa Inc V reported its fourth quarter financial results on Monday, in line with the Street’s expectations.
• Guidance for the next four years was slightly below consensus on the back of FX, macro and gas headwinds.
• Following the earnings call, analysts at Pacific Crest reiterated an Overweight rating on the stock, boosting its price target from $76 to $80, while Citi confirmed its Buy rating and $82 price target.

In two separate reports issued Monday, Pacific Crest and Citi qualified Visa’s stock as a Buy, both pointing out the –somewhat overlooked- importance of Visa Europe.

Pacific Crest

Pacific Crest’s Josh Beck assured, “A wave of change makes it the 'right time' for Visa Europe to sell.”

“The upfront purchase price of €16.5 billion, which includes €11.5 billion of cash and €5 billion in preferred stock, and €4.7 billion in additional earn-out were in line with rising expectations,” he added. “The preferred conversion ratio could also provide a funding source for potential legal fees and litigation settlements.”

Looking at the bigger picture, Beck continued to explain that sustained execution will be a key element in the enhancement of shareholder value.

Citi

On the other hand, Citi analysts expressed their disappointment with the light core earnings guidance, noting however that the market seems to have already discounted the trimmed outlook.

The experts went on to state that they would be buyers on the decline and believe “1) the longer-term Visa Europe accretion guidance is conservative and 2) core earnings power of V remains strong and they’ll lap FX in ’17.”

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.