not vested
Visa, Inc. (V)
Visa is a $480 billion company, and a long-time component of the Dow Jones Industrial Average. The company dominates the world’s banking card industry, with a 50% market share globally, excluding China.
The US Department of Justice has opened an investigation of Visa’s debit card practices – specifically, into whether or not the company has engaged in illegal anticompetitive practices by preventing merchants from routing Visa-branded debit card transactions over less-expensive networks.
The company’s last three quarters have all shown year-over-year declines in revenues and earnings – although, since Q3 fiscal 2020, the results have been growing sequentially, an indication that improved economic conditions are stimulating commercial activity.
Visa’s most recent report, for Q1 fiscal 2021, showed $5.7 billion at the top line with $3.04 billion in net earnings. These numbers were down 6% and 4% from the prior year quarter.
Three major metrics, however, all point toward continued recovery: payments volume, cross-border volume and processed transactions were up from 4Q20. And even the top line revenue was up 12% quarter-over-quarter.
Visa’s management expressed confidence in the results, and showed it by authorizing an additional $8 billion to the company’s share repurchase program, bringing the total fund available for capital returns to $11 billion. This came after Visa returned $2.5 billion to shareholders in fiscal first quarter.
RBC's Daniel Perlin rates Visa stock an Outperform (i.e. Buy), with a $297 price target indicating a potential 36% upside in the year ahead.
Overall, it’s clear that Wall Street agrees with the bullish outlook on Visa. The stock has 18 recent reviews, breaking down 16 to 2 in favor of Buy versus Hold. V shares are trading for $216.86, and their average target of $247.67 implies a one-year upside of ~13%.
Source: Tip Ranks
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