Wedbush Talks Libra With Visa's Executive Team

Wedbush analysts met with Visa Inc V executives last week, and part of the conversation focused on its partnership with Facebook, Inc. FB to facilitate the digital currency Libra.

The Analyst

Moshe Katri maintains an Outperform rating on Visa with an unchanged $187 price target.

The Thesis

Most if not all of the announced 28 members of the Libra Association will need to contribute funding of at least $10 million, although most members are still waiting for pertinent details related to security and other factors, Katri said in a Tuesday note. (See his track record here.)

On its end, Visa is focused on the 1.7 billion Facebook users across the world that Libra could target, 50% of which are based in countries with minimal access to bank accounts, the analyst said.

Regulatory bodies will be looking at Libra across multiple angles, including data privacy and security and the impact of a new currency on the global financial system, he said.

Visa is expected to benefit from a new secular growth tailwind as it gains market share in electronic payments through its involvement with Libra, Katri said. It's also possible the market could be "overestimating" Libra's true disruptive nature over the payments ecosystem, he said.

Aside from Libra, Visa executives said M&A deals that combine merchant issuers and processors make it easier for Visa to "better scale is innovations," according to Wedbush.