Goldman Sachs Upgrades Visa (V) to Conviction Buy List; Volume Growth and Capital Alloca

January 9, 2013 7:55 AM EST Send to a Friend
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Price: $216.44 --0%

Rating Summary:
    17 Buy, 6 Hold, 1 Sell

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Today's Overall Ratings:
    Up: 6 | Down: 14 | New: 17
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Goldman Sachs added Visa (NYSE: V) to Conviction Buy List with a price target of $188.00 (from $160.00), suggesting 19% upside.

The firm said Visa is well positioned at the intersection of international growth and multi-channel payments convergence, which they believe remain two underappreciated drivers that can power faster transaction volume growth. "We believe that growth contribution from its international and online/mobile commerce (E/M commerce) remains underappreciated, and in our view these are the key drivers that should add to the longterm transaction volume growth of the model."

Goldman also expects the new CEO to focus on further capital allocation efforts. "V has the potential for continued capital allocation with annual FCF of $5 bn+, V’s options are significant and can include a combination of continued buybacks or faster than expected dividend growth, a factor which we expect will come in to better focus with new CEO Charles Scharf now at the helm." The firm's base case suggests annual buybacks of $2 bn and dividend growth of 20%.

The firm revised FY13E-FY15E EPS estimates are now set at $7.46/$8.83/$10.48 and reflect a CAGR of 19.3%, up from previous forecast of 16.6%.



For an analyst ratings summary and ratings history on Visa click here. For more ratings news on Visa click here.

Shares of Visa closed at $159.36 yesterday.




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Analyst PT Change, Hot Upgrades, Upgrades

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Goldman Sachs Conviction Buy List, Goldman Sachs, Dividend

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