BMO maintains Visa stock Outperform rating, $370 target

Monday, Visa (NYSE:V) shares maintained their Outperform rating with a steady price target of $370.00, as confirmed by BMO Capital Markets. Currently trading at $348.53 and near its 52-week high of $357.15, Visa has demonstrated strong momentum with a 30.79% return over the past six months. According to InvestingPro analysis, the company’s current valuation suggests it may be slightly overvalued compared to its Fair Value. The endorsement follows Visa’s Investor Day, which provided insights into the company’s growth prospects and strategies.

Visa’s recent presentation aimed to alleviate investor worries about the company’s growth potential in consumer payments, even in regions with advanced digital payment infrastructures. With a robust revenue growth of 10.35% and an impressive market capitalization of $680.61 billion, the company highlighted approximately $23 trillion in consumer spending areas that are still considered underserved. Visa’s approach to non-card payments, particularly through Visa Direct for account-to-account (A2A) transactions, was also a focal point, showcasing its competitive edge in this domain.

The financial services giant is poised to benefit from the ongoing shift towards digital commercial payments and money movement. With an exceptional financial health score rated as "GREAT" by InvestingPro, which offers 12 additional valuable insights about Visa’s performance, the company continues to demonstrate strong market leadership. Visa’s Investor Day detailed the company’s various value-added services (VAS), which have been experiencing high-teen growth rates. BMO Capital’s analysis suggests that the detailed overview of Visa’s VAS offerings has given investors a clearer picture of the company’s diverse portfolio.

BMO Capital remains optimistic about Visa’s prospects, citing the company’s capacity to maintain double-digit top-line growth into the foreseeable future. The market consensus aligns with this outlook, projecting an approximate 10% growth rate.

Visa’s ongoing performance and strategic initiatives appear to underline the company’s ability to capitalize on the expansive opportunities within the digital payments landscape, reinforcing confidence in its sustained growth trajectory.

In other recent news, Visa has reported strong financial performance, with adjusted earnings per share of $2.75, surpassing consensus estimates. The company’s net revenues reached $9.6 billion, exceeding expectations and reflecting an 11% growth at constant currency. This robust performance led Macquarie to raise its price target for Visa to $400, maintaining an Outperform rating. Analysts from UBS and Keefe, Bruyette & Woods also reiterated their positive outlooks, each setting a $400 price target, highlighting Visa’s growth drivers and strategic insights shared during its Investor Day.

Additionally, Visa is reportedly considering a return to the Russian market, which it exited in March 2022 due to geopolitical tensions. This potential move comes as Russia has developed its own payment systems in response to the exit of international players like Visa and Mastercard (NYSE:MA). In partnership news, Fold has launched a new Visa credit card offering Bitcoin rewards, further expanding Visa’s reach in the cryptocurrency space. The card allows users to earn Bitcoin instead of traditional rewards, aligning with Fold’s strategy to promote Bitcoin as a savings asset.

Visa’s management has updated its fiscal year 2025 guidance, now expecting net revenue growth in the low double digits, with EPS growth anticipated in the low teens. The company has also focused on leveraging artificial intelligence to enhance operational performance, citing productivity gains as a result. These developments underscore Visa’s efforts to maintain its growth trajectory and adapt to evolving market conditions.

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