Visa Analysts Encouraged By Q4 Results, 2020 Guidance

Visa Inc V reported another solid quarter Thursday, with double-digit revenue and earnings growth, and announced upbeat guidance for fiscal year 2020.

The Results

Visa reported fourth-quarter earnings of $1.47 per share. The figure beat Street expectations by 4 cents per share, backed by better revenue growth and lower taxes.

The company posted net revenue of $6.14 billion, topping the consensus estimate of $6.08 billion.

Total payment volumes grew 7.4% in the quarter, with continued strength in cross-border volumes.

The Analysts 

Morgan Stanley analyst James Faucette maintained an Overweight rating on Visa and raised the price target higher from $191 to $207.

Raymond James analyst John Davis reiterated an Outperform rating on Visa and raised the price target from $193 to $205.

The Takeaways 

Investors are likely to feel positive about Visa’s strong volume trends in the fourth quarter, with international volumes accelerating in every region and the company stating that macro conditions are stable, Faucette said in a Friday note. 

Visa's 2020 guidance indicates “steady to improving trends,” although with some currency headwinds, the analyst said. 

Visa projected low double-digit revenue growth, ahead of buy-side expectations.

“We continue to look for compounding mid-teen EPS growth for the foreseeable future, as V benefits from secular drivers (electronification of payments, B2B) and monetizes new payments forms through its various investments,” Faucette said. 

Raymond James’ Davis said the guidance is particularly encouraging in light of higher-than-expected incentives due to elevated renewals.

Price Action

Visa shares were trading 0.83% higher at $177.85 at the time of publication. 

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