Buy gold, crypto and China, tread carefully on rich U.S. tech: BofA’s Hartnett
On Friday, UBS reiterated its Buy rating and $400.00 price target for Visa (NYSE:V) stock, representing a potential 14% upside from the current price of $351.56. The affirmation comes as Visa prepares for its first investor day since 2020, an event that UBS suggests will bolster confidence in the company’s growth trajectory and compounding potential. The financial services giant, with a market capitalization of $684.5 billion, has demonstrated strong momentum with a 31% return over the past six months. Visa is expected to offer investors a clearer view of its business drivers, including detailed figures on the growth and size of its Value-Added Services segment.
The company is also set to discuss the ongoing expansion of its Total (EPA:TTEF) Addressable Market (TAM) through carded and non-carded transactions, as well as its broader payment optimization services, which contribute to the "Visa multiplier effect." This effect is seen as a benefit for Visa’s clients, helping them to enhance their payment operations. According to InvestingPro data, Visa maintains impressive profitability with a 97.8% gross margin and has consistently raised its dividend for 17 consecutive years, showcasing its operational excellence.
Looking forward, Visa highlighted a strategic path that builds on its "network of networks" approach, a key focus for the company throughout the 2020s. While InvestingPro analysis suggests the stock is currently trading above its Fair Value, investors can access 10+ additional exclusive ProTips and comprehensive financial metrics through the Pro Research Report, available for over 1,400 top US stocks. The strategy will evolve towards a "Visa-as-a-Service" model, aimed at powering a wide array of payment types by unbundling the Visa platform. UBS notes that the investor day presentations emphasized increased transparency and strategic insight, elements that are supportive of Visa’s goal to sustain net revenue growth in the high single digits to low double digits range over the medium to long term. The company’s current revenue growth of 10.35% aligns with these objectives, while maintaining strong financial health metrics according to InvestingPro’s comprehensive analysis.
In other recent news, Visa has been in the spotlight with several notable developments. Macquarie raised its price target for Visa to $400, citing strong earnings performance. The company reported adjusted earnings per share of $2.75, surpassing expectations, and net revenues of $9.6 billion, which also exceeded estimates. Meanwhile, Keefe, Bruyette & Woods reiterated its Outperform rating for Visa, maintaining a $400 price target, highlighting Visa’s growth strategies and potential for sustained revenue momentum.
Additionally, Visa and Mastercard (NYSE:MA) are reportedly considering a return to the Russian market after suspending operations in March 2022 due to geopolitical tensions. This potential re-entry comes as Russia has been strengthening its national payment systems. In a separate development, Fold launched a new Visa card offering Bitcoin rewards, positioning itself in the growing crypto rewards market.
Furthermore, the recent appointment of Treasury Secretary Scott Bessent as acting director of the Consumer Financial Protection Bureau (CFPB) could impact credit card companies like Visa. This appointment may lead to a pause in certain regulatory rulings, affecting the financial landscape for companies involved in consumer payments. Visa continues to navigate these diverse developments, maintaining its focus on innovation and global expansion.
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