Visa Inc V shares traded slightly lower Tuesday after the company said Monday afternoon that it expects to take between a 2.5% and 3.5% revenue hit from the coronavirus in the fiscal second quarter. The filing comes after payments competitors Mastercard Inc MA and Paypal Holdings Inc PYPL issued similar warnings to investors due to the outbreak.
Visa said the international spread of the coronavirus has negatively impacted its cross-border business, which is a major revenue source for the company.
The stock had little reaction to the news on Tuesday suggesting coronavirus headwinds pay already be priced into the stock at this point. Several Wall Street analysts weighed in on Visa following the guidance cut. Here’s a sampling of what they’ve had to say.
Bank of America analyst Jason Kupferberg said the coronavirus hit Visa suggested is in line with his expectations.
“Given the suddenness of the Coronavirus impacts, we believe that the EPS impact in F2Q could be greater than revenues, given V/MA’s fixed-cost base,” Kupferberg wrote in a note.
Stephens analyst Brett Huff said much of the risk related to the coronavirus is already priced into Visa shares.
“[We] remain buyers of V/MA/PYPL (though like V>PYPL>MA) given [we] think much virus risk [is] now priced in,” Huff wrote.
Buy The Dip
Baird analyst David Koning said Visa remains a great long-term investment.
“We think it's fair to say if trends continue to stay at March-level, then the rest of the year could decelerate from FQ2 (given trends in March are expected to be worse than trends through February),” Konig wrote.
Wedbush analyst Moshe Katri cut the firm’s 2020 EPS and revenue estimates from $6.20/$25.482 billion to $6.18/$25.412 billion.
“In markets where Visa processes the majority of the company's transactions, domestic credit and debit spending growth remains stable with the exception of some impact in Hong Kong and Singapore,” Katri wrote.
Ratings And Price Targets
- Bank of America has a Buy rating and $228 target.
- Stephens has an Overweight rating and $228 target.
- Baird has an Outperform rating and $220 target.
- Wedbush has an Outperform rating and $215 target.
Visa's stock traded around $189.63 per share at time of publication.
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