Visa Delivers 'Solid' Earnings Beat, 6 Analysts Provide Key Takeaways: 'Blame Easter For Softer Trends'

Shares of Visa Inc V were climbing in early trading on Wednesday, after the company reported an earnings beat for its fiscal second quarter.

Here are some key analyst takeaways from the release.

• Goldman Sachs analyst Will Nance reiterated a Buy rating, while raising the price target from $328 to $335.
• Oppenheimer analyst Jake Kooyman maintained an Outperform rating, while lifting the price target from $297 to $299.
• Wedbush analyst Moshe Katri reaffirmed an Outperform rating, while raising the price target from $280 to $300.
• BMO Capital Markets analyst Rufus Hone reiterated an Outperform rating and price target of $300.
• Keefe Bruyette & Woods analyst Sanjay Sakhrani maintained an Outperform rating and price target of $325.
• Mizuho Securities analyst Dan Dolev reaffirmed a Neutral rating and price target of $265.

Check out other analyst stock ratings.

Goldman Sachs: Visa reported "solid" quarterly results. Earnings of $2.51 per share beat the consensus of $2.44 per share. The results were driven by "broadly inline trends in revenues aided by a large beat on incentives," Nance said.

Softer trends in April were seen by the company as "largely a function of Easter timing."

Although management lowered the volume guidance to reflect softer results in the Asia Pacific (APAC) region, they broadly reiterated expectations for improving ticket sizes in both the US and the rest of the world excluding APAC for the rest of the year, "which had been an area of skepticism among investors," the analyst further stated.

Oppenheimer: Visa’s non-GAAP earnings grew by 20% to $2.51 per share, while net revenue on a constant currency basis rose 10% year-over-year to $8.6 billion, with both figures beating expectations, Kooyman said.

"Other revenue largely drove the delta versus the Street, which increased 37% year over year driven by strong consulting and marketing services revenue growth," he added.

"Moreover, overall spending trends remained solid, evidenced by an 8% year-over-year increase in payments volume, 11% rise in processed transactions and a 16% gain in constant currency cross-border volume," the analyst wrote. Visa remains on track to generate low double-digit top-line growth and earnings growth in the low teens, he further stated.

Wedbush: Visa reported stronger-than-expected quarterly results and reiterated its full-year guidance, Katri said. Payment volume growth accelerated sequentially by 100 basis points (bps) in the US, but slowed internationally by 100 bps, keeping the aggregate consistent, he added.

"While FY24 guidance was reiterated, management reset expectations for Total volume growth to high single digits from low double digits due to APAC travel slowing recovery," the analyst wrote. "This is being offset by stronger than expected performance in high-yield eCommerce," he further stated.

BMO Capital Markets: Given Visa's "solid" quarterly results, the reiterated revenue guidance for the full year appears "de-risked, supported by accelerating VAS/ New Flows growth, resilient cross-border trends and slower 2H growth in incentive payments," Hone wrote in a note.

"While US payment volume in the first 3 weeks of April are tracking +5% YoY (down slightly from ~6% YoY in March/FY2Q24), Visa noted that the earlier Easter timing this year accounted for the slight sequential deceleration," he added.

Keefe, Bruyette & Woods: Visa reported an earnings beat "driven primarily by client incentives (+$0.10/share), with some added benefit from higher other income (+$0.02/share) and a lower tax rate (+$0.01/share)," Sakhrani said.

He added, however, that the beat was partially offset by a decline in gross revenues, higher opex, and an increase in share count.

"Visa's results are tracking in-line with expectations, which is a positive relative to intra-quarter concerns that full year targets may prove to be too high," the analyst further stated.

Mizuho Securities: Visa's strong quarterly results "marked by accelerating US volumes (+6% vs. +5%) and unchanged guide should drive a sigh of relief rally in the stock," Dolev said.

Although the company maintaining its full-year revenue guidance is "a key positive," the slower trends in April "can be a potential hurdle" to achieving the same pace of revenue growth in the second half of the year, he added.

V Price Action: Shares of Visa had risen by 0.86% to $276.47 at the time of publication on Wednesday.

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