Analysts positive on Visa (V) shares post earnings

January 27, 2023 9:42 AM EST
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Visa (NYSE: V) reported earnings for its latest quarter after the close on Thursday, pushing analysts to raise their price targets on the stock.

Visa shares are up 1.5% following the report, which saw the company's top earnings and revenue expectations despite a revenue growth slowdown.

On Friday, Morgan Stanley analyst James Faucette raised his firm's price target on Visa to $288 from $284, keeping an Overweight rating on the stock. The analyst told investors in a research note that trends remain fairly stable with "expense levers ready if environment were to worsen."

While Faucette noted that consumer spending patterns remain consistent, he also said the firm is encouraged by Visa's execution across its other
growth levers of new flows and value-added services, "both of which are growing revenue over 20%."

Credit Suisse analyst Moshe Orenbuch raised the price target on Visa to $250 from $245, maintaining an Outperform rating. Orenbuch explains in a research note that the firm likes that Visa's net revenues were above Street consensus by 3% and the fact that direct transactions grew 39% YoY, excluding Russia.

In addition, he noted that "US debit volume grew 8% YoY FXN (55% vs. 2019) against difficult comps with management noting consumer spend shifting from goods to services supporting the strong debit volume levels."

UBS' price target for Visa was lifted to $293 from $287, with its Buy rating maintained. Analyst Rayna Kumar said strong consumer spending is "still in the cards."

"Post earnings report, Visa remains one of our top 2023 ideas," said Kumar. "For 1Q/FY23, Visa revenue & earnings exceeded our estimates and the Street fueled by robust cross-border fees, better than expected Services yield vs. our model, lower FX headwind (2% vs. our 5% on revenue) and 20%+ constant dollar growth in value-added services and new flows."

By Sam Boughedda

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