Visa Inc V reported strong quarterly results Thursday, with gross revenue of $5.7 billion and adjusted earnings of $1.42 per share, ahead of the Street's expectations of $5.5 billion and $1.28 per share, respectively.
The Visa Analysts: Josh Beck of KeyBanc Capital Markets maintained a Sector Weight rating on Visa, while James Faucette of Morgan Stanley reiterated an Overweight rating with a $233 price target.
The Visa Thesis: Visa delivered a solid performance despite challenging macro conditions, backed by strength in the International and Service segments, Beck said in the KeyBanc note.
Cross-border data was encouraging, although management did not provide guidance for fiscal 2021 and “commentary suggests it is too early to depict a trend based on recent restriction uncertainty,” the analyst said.
The commentary also suggested that Visa’s second-quarter gross revenue growth may be flattish year-on-year, “with the most improvement driven by international revenues,” he said.
Faucette said Morgan Stanley's biggest takeaway from the report was a change in Visa's tone.
“While commentary around near-term volume trends remains cautious, mgmt spoke of keeping their current schedule of pricing increases and bring back expenses,” the analyst said.
“While headwinds from social distancing measures and travel restrictions persist through Jan, we remain optimistic about the long-term growth of the business.”
V Price Action: Visa shares were down 1.98% at $194.29 at last check Friday.
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