- Brexit is bad news for Visa (V -3.1%) and MasterCard (MA -3.8%), Sandler O’Neill says, seeing slowing overall GDP growth ahead for Europe at a time of already weak European growth, meaning that spending on Visa and MasterCard networks will slow.
- The firm cites four major downsides for card networks following the vote: slower consumer spending, less cross-border activity, forex headwinds to earnings in the U.K. and EU, and slower migration from cash to digital payments.
- The timing of Visa’s acquisition of Visa Europe now looks unfortunate, and guidance for the deal to be accretive to EPS in the high single digits in coming years could drop into the mid-single digits post-Brexit, the firm says.