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Investing.com -- Mizuho upgraded Visa Inc (NYSE:V) to Outperform from Neutral and raised its price target to $425 from $359, saying the shift from cash to cards in the U.S. still has a long runway and could support another decade of domestic growth.
The brokerage estimates true U.S. card penetration is about 75%, lower than the widely assumed 80-90%, suggesting there is still significant room for Visa to expand volumes.
“This leaves room for another decade of solid top-line growth domestically,” analysts at Mizuho (NYSE:MFG) said in a note.
Visa’s growth has lagged behind U.S. personal consumption expenditures (PCE) post-COVID, raising concerns that card usage had peaked.
But Mizuho attributes that trend largely to a temporary shift in spending toward lower card-penetration categories like fuel and utilities, which it believes is now reversing.
Mizuho also pointed to Visa’s performance in high-penetration markets such as Canada and the Nordics, where the company continues to outpace PCE growth.
These regions serve as case studies that growth can continue even when most of the population already uses cards.
The firm raised its FY26 and FY27 estimates slightly on stronger volume expectations and lifted its valuation multiple to 31 times forward earnings, up from 28x, to reflect renewed optimism about Visa’s domestic growth prospects.
Visa shares are trading marginally up $369. Mizuho’s new target price implies upside of about 15%.