Wedbush Remains A Visa Bull After Chat With Management

Wedbush's bullish stance on Visa Inc V remained unchanged after the company's non-deal roadshow (NDR).

The Analyst

Wedbush's Moshe Katri maintains an Outperform rating on Visa with an unchanged price target of $187.

The Thesis

  • Katri's chat with Visa CFO Vasant Prabhu solidified the case for owning Visa's stock for a few reasons.
  • Visa's multiple acquisitions this year will enhance existing capabilities or provide new ones to offer multiple products. For example, the May acquisition of Earthport gives Visa exposure to every bank account globally to move payments.
  • Visa should see incremental synergies in its fourth year of owning Visa Europe. New opportunities the company can address includes share gain in historically strong markets, catering to new financial technology (fintech) startups and benefits from credit-related renewal cycles.
  • The credit card company is positioned to "withstand" an economic slowdown. Granted, revenue from ticket price will be impacted but revenues generated per click will "be resilient." Also, part of the company's cost base is discretionary which suggests a "significant earnings cushion."
  • Under a worst case scenario, the Democrats will control all three branches of the U.S. government and call for new regulations on the banking sector. The credit sector could be impacted and a limit on interchange rates would place a cap on payment valuations.

Price Action

Shares of Visa were trading lower by 0.38% Tuesday afternoon at $174.36.

Related Links

The Street Reacts To Visa's Q3 Earnings

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Posted In: credit cardsMoshe KatripaymentsWedbushAnalyst ColorReiterationAnalyst Ratings

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