Goldman Sachs’ James Schneider expects Visa Inc to deliver “a solid print,” driven by “stable retail trends with moderating FX headwinds, partly offset by tepid cross-border results.”
Schneider maintains a Buy rating on the company, with a price target of $86.
Robust Trends
“We remain encouraged by recent issuer portfolio wins despite an increasingly competitive environment, in addition to potential volume acceleration from Visa Europe,” the analyst mentioned.
Schneider expects the company to have witnessed stable purchase volume growth trends across most regions, with robust results in the United States, strengthening trends in Latin America and weaker results in the APAC and Europe.
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“We expect cross-border fees will likely remain tepid given weak inbound travel volumes – but note that FX volatility could be a modest tailwind in the September quarter,” the analyst stated.
Stock Will Rise
Schneider further believes the steady payment volume trends, along with comments regarding potential accretion from Visa Europe, will drive the stock up.
The analyst noted this was especially significant, given that investor expectations had weakened heading into the earnings report and driven by concerns associated with U.S. retail.
However, Schneider also said these concerns were overdone.
The analyst believes “Visa’s unique balance of defensive growth, high returns, and strong balance sheet should allow the stock to outperform even in a difficult macro environment.”
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| Date | Firm | Action | From | To |
|---|---|---|---|---|
| Jul 2016 | Barclays | Maintains | Overweight | |
| Jun 2016 | Oppenheimer | Maintains | Outperform | |
| Jun 2016 | JP Morgan | Upgrades | Not Rated | Overweight |
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