What's Going On With Visa Stock?

Visa Inc V shares are trading higher by 2% to $315.35 during Wednesday’s session. The stock is rising following the latest inflation data, as expectations of potential interest rate cuts increased.

The slowing of underlying price growth, evidenced by a slight dip in core inflation, suggests that the Federal Reserve could take a more dovish approach in 2025.

For Visa, a reduction in interest rates could lead to lower borrowing costs, boosting consumer spending and increasing the volume of transactions processed through its network.

Visa’s revenue is highly correlated with consumer spending, particularly in a low-rate environment where credit becomes cheaper, potentially driving greater adoption of Visa’s payment products.

Additionally, lower rates can enhance investor sentiment, as the cost of capital decreases and financial markets become more liquid, further strengthening Visa's position as a stable, profitable company in the financial technology space.

Read Also: Big Banks Crush Q4 Earnings Forecasts: Financial Stocks Set For Biggest 1-Day Rally Since Trump’s Election

Investors can gain exposure to Visa by investing in the Financial Select Sector SPDR Fund XLF.

Is Visa A Good Stock To Buy?

An investor or trader's decision to buy or sell a stock is unique to their time horizon and risk tolerance. Many typical investors evaluate earnings growth and valuation on a particular stock before making a decision.

For example, for Visa V, you'll notice that earnings in its last quarter grew 5.04% source. As an investor, you'll want to decide whether that's better or worse than what you'd like to see among stocks in your portfolio.

On the valuation side, Visa's price to earnings ratio – a measure of how much an investor pays for the company's earnings – is projected to compress 2.66% in the current quarter when compared with last year. That places it below similar businesses Mastercard, Fiserv, PayPal Holdings in its sector. You'll need to decide whether that makes it more or less attractive based on how you think the company will perform over time.

There are many different valuation metrics that may help you make a decision. Find more on Visa's quote page, or if you'd like a deeper dive in an advanced program, try Benzinga PRO for free.

V has a 52-week high of $321.62 and a 52-week low of $252.70.