Analysts Bullish on Visa Following Payment Volume and Transaction Data

Analysts Bullish on Visa (V) Following Payment Volume and Transaction Data

By Sam Boughedda

Visa (NYSE:V) reported payment volume and transaction data from July and August (through August 28) on Tuesday, revealing U.S. payments volume rose 11% from a year ago.

In addition, credit payments volume rose 17%, while debt volume increased 7%, both rising one point since July. Following the news, analysts released bullish reports on the stock:

A Baird analyst who has an Outperform rating and $265 price target on Visa, stated that the firm like the stock a lot as outsized growth from x-border travel recovery and inflation continues.

"July/August metrics (U.S. credit/debit, processed transactions, and x-border) generally stable/mildly accelerated vs. FQ3 (relative to 2019 basis). The qtd trends are generally ~1% above our FQ4-22 estimates," wrote the analyst.

Meanwhile, a Morgan Stanley analyst maintained an Overweight rating and $291 price target on Visa. "We continue to expect that market conviction in the timing of a sustainable cross-border travel return will be a key positive stock catalyst for V and MA," said the analyst.

"Despite continued healthy volume trends, we acknowledge that uncertainty remains on the travel outlook heading into the fall and 2023 given concerns around recession risk, inflation, and normalizing consumer credit coinciding with a potential moderation in post-pandemic travel demand. For now, we think travel momentum appears resilient," added the Morgan Stanley analyst.

A UBS analyst has a Buy rating and a $296 price target on Visa. She said that quarter-to-date trends "remain positive" for the card networks, in their view, as U.S. consumer spending remained steady while cross-border volume growth stayed strong.

The analyst reiterated a Buy rating given they expect "Visa will continue to benefit from the large global cash conversion opportunity and further cross-border travel reopenings."

Finally, a BofA analyst said trends remained largely stable through July/August 28. The analyst, who maintained a Buy rating and $261 price target on Visa, stated overall, "trends across nearly all metrics remained largely stable" relative to Visa's last update, as "cross-border travel-related activity in Europe and APAC continued to recover strongly vs. 2019 levels."

"Overall, on balance we view this update as incrementally positive in light of general concerns around the effects of the macro environment on consumer spending. We continue to remain bullish on Visa's business model quality, recession-resistance, and secular tailwinds," added the analyst.