Visa (V) Price Target Lifted to $300 at JPMorgan Ahead of Q1 Print

JPMorgan analyst Tien-tsin Huang reiterated an Overweight rating and boosted his price target on Visa (NYSE: V) to $300.00 (from $248.00) ahead of Q1 results on January 29th.

Huang sees Rev/EPS at $3.328bn/$2.49 versus the Street at $3.340bn/$2.49. The analyst said key items to watch this quarter include: include: (1) CFO search update; (2) cross-border revenue yield outlook (FX volatility has increased, new pricing starts in April); (3) FX and gas impact to outlook (Visa hedges FX risk); and (4) the pace of the Chase portfolio migration.

Meanwhile, the firm is tweaking estimates for recent FX moves and a portion of anticipated pricing actions (conservative assumption).

The analyst further listed the following 5 things to consider; (1) Visa indicated FX would be about a two-point drag to FY15 revenue growth on their last earnings call. We think FX is probably a three-point drag at current levels, and hedging likely defers impact to F2H. (2) We estimate planned pricing changes could add at least 3 points of growth in F2H15. (3) Daily FX volatility has increased in recent months (more than doubling from lows in July), which should drive higher cross-border revenue yields (a sticking point for investors in recent quarters). (4) We believe fuel purchases account for less than 10% of Visa’s U.S. payment volume; at current prices, fuel could be a two- to three-point drag to U.S. purchase volume growth, but a fairly immaterial headwind to revenue and EPS. (5) CFO search update, understanding current CFO Pollitt’s plan to retire by June 2015.

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 $258.29 yesterday.

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