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On Monday, TD Cowen analyst Bryan Bergin updated Visa Inc .’s (NYSE:V) financial outlook, increasing the price target to $382 from the previous $363, while reaffirming a Buy rating for the company’s shares. The new target represents potential upside from the current price of $349.46, though InvestingPro analysis suggests the stock is trading above its Fair Value. Bergin’s assessment followed Visa’s Investor Day (IA Day), which offered insights into the company’s strategies and financial model without presenting any major surprises.
During Visa’s IA Day, the company outlined its solutions and strategies, confirming its strong market position as evidenced by its $682.85 billion market capitalization and impressive 97.82% gross profit margin. Visa also showcased its depth of talent and the ongoing evolution of its strategy, especially the shift towards offering unbundled solutions aimed at fostering growth. Visa-as-a-Service was highlighted as a product emerging from Visa’s decade-long technological transformation. InvestingPro data reveals the company maintains strong financial health with a "GREAT" overall score, supported by 12 additional key insights available to subscribers.
Bergin expressed appreciation for the additional disclosure regarding Visa’s Value Added Services (VAS) and New Flows, viewing it as a positive factor for potential multiple expansion. This is due to the growing investor confidence in the drivers behind Visa’s favorable shift in revenue mix, which is expected to increase from over 30% of net revenue in FY24 to more than 50% in the future. The company’s current revenue growth of 10.35% and consistent dividend increases for 17 consecutive years demonstrate its strong execution capability.
The analyst also found value in Visa’s quantified growth framework, which aligns with the consensus. The decision to maintain existing estimates while raising the price target to $382 is based on a 29 times CY26 P/E (price to earnings) ratio. Bergin emphasized that amidst market volatility, Visa’s consistent and durable financial model stands out as particularly attractive to investors. The stock currently trades at a P/E ratio of 33.12x, with detailed valuation metrics and comprehensive analysis available in the Pro Research Report on InvestingPro.
In other recent news, Visa has been the focus of several key developments. Visa’s Investor Day provided detailed insights into its growth prospects, with BMO Capital Markets maintaining an Outperform rating and a $370 price target. The company highlighted its potential in consumer payments and non-card transactions, particularly through Visa Direct for account-to-account payments. UBS and Keefe, Bruyette & Woods also reiterated their positive outlook on Visa, both setting a price target of $400. UBS emphasized Visa’s "network of networks" strategy, while Keefe highlighted the company’s innovation and global expansion efforts.
Additionally, Visa and Mastercard (NYSE:MA) are reportedly considering a return to the Russian market after suspending operations there in 2022 due to geopolitical tensions. Meanwhile, Fold has launched a new Visa credit card offering Bitcoin rewards, partnering with Visa to provide up to 2% in Bitcoin rewards. This new financial product positions Bitcoin as a savings asset, diverging from traditional credit card rewards. Visa’s global network plays a crucial role in supporting Fold’s financial growth plans, including a potential Nasdaq listing.
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