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Visa (V) Well Poised to Beat on Q4 Earnings: Here's Why?

Visa Inc. V is set to report fiscal fourth-quarter 2016 results on Oct 24, 2016 after market close. Last quarter, the company had posted a positive earnings surprise of 2.99%. Let’s see how things are shaping up for this announcement

Why a Likely Positive Surprise?

Our proven model shows that Visa is likely to beat on earnings as it has the right combination of the two key components. Note that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or #2 (Buy) or at least #3 (Hold) to have a significantly higher chance of beating estimates.

Zacks ESP: The Earnings ESP for Visa is +1.37%. This is because the Most Accurate estimate of 74 cents per share is a penny above the Zacks Consensus Estimate.

Zacks Rank: Visa’s Zacks Rank #3 increases the predictive power of ESP. The combination of Visa’s positive ESP and favorable Zacks Rank makes us fairly confident of an earnings beat this quarter.

Stocks with a Zacks Rank #4 or 5 (Sell rated) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Factors Driving a Likely Earnings Beat

U. S. credit card volume during the fiscal fourth quarter was likely driven by...