Visa (V) Shares Soar on Beat-and-Raise, Analyst Encouraged

January 28, 2022 5:31 AM EST
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Shares of Visa (NYSE: V) are up 5% in pre-open Friday after the payment-processing giant hit the $7 billion mark in quarterly revenue for the first time.

The financial services giant reported a Q1 net income of $4 billion, or $1.83 per share, compared to $3.1 billion, or $1.42 per share a year ago. Adjusted EPS for the quarter stood at $1.81, beating analyst consensus of $1.70 in both GAAP and adjusted EPS.

Net revenue hit $7.06 billion in the quarter, up from $5.69 billion from the year-ago period, and beating the FactSet consensus of $6.79 billion.

Visa reported payments volume growth of 20%, while the number of processed transactions rose 21%. Cross-border volume excluding transactions within Europe was up 51%, while overall cross-border volume jumped 40%.

Shares of Visa surged 5% in after-hours Thursday.

“As we look ahead, we do not believe the current surge in the pandemic will curtail the recovery,” said Visa CEO Al Kelly. “We see economies around the world continuing to improve and, as restrictions are lifted, cross-border travel will continue to recover.”

Visa voiced its optimism about its future outlook, anticipating better revenue growth rates, relative to pre-coronavirus levels.

BMO analyst James Fotheringham raised the price target on Visa to $247.00 per share from the prior $240.00 to reflect a beat-and-raise quarter.

“V raised its prior 2022E outlook meaningfully: revenue growth is now expected at the high end of high-teens% (from high end of mid-teens%), and incentives are now expected at 25.5-26.5% of gross revenues (from 26-27%). We were also encouraged by management's longer-term guidance for sustained growth above pre-COVID-19 levels. We recommend V (along with MA) as core long-term holdings,” Fotheringham wrote in a memo.

Elsewhere, Morgan Stanley analyst James Faucette raised the price target on Visa to $283.00 (from $280.00) while maintaining an Overweight rating.

Visa stock price closed at $206.15 yesterday.

By Senad Karaahmetovic | [email protected]

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