Earnings Preview: Visa

| About: Visa Inc. (V)
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Visa (NYSE:V) is expected to report Q3 earnings after the market close on Wednesday, July 25 with a conference call scheduled for 5:00 pm ET.


Analysts are looking for EPS of $1.45 on revenue of $2.52B. The consensus range is $1.40-$1.51 for EPS, and $2.47B-$2.57B for revenue, according to First Call. Investors may be encouraged by the higher than expected EPS reported by American Express (NYSE:AXP) on July 18, although the company's revenue came in lower than expected. In addition, American Express said that its cardmembers' spending "remained healthy," although it decelerated year-over-year.

Analyst Views

Meanwhile, on July 13, Barclays increased its price target on Visa to $142 from $133. The firm contended that Visa is a defensive play due to its lack of direct European exposure, limited foreign exchange exposure, and low cyclical sensitivity. Barclays maintained an Overweight rating on the shares. Furthermore, on July 16, Deutsche Bank recommended aggressively buying shares of Visa and Mastercard (NYSE:MA) after the companies announced a legal settlement with some U.S. merchants. The firm thinks that the deal removes a big risk for the card networks. However, the agreement does allow merchants to begin offering discounts to customers who pay with cash or checks, potentially increasing uncertainty for Visa and Mastercard. Finally, in a note to investors earlier today, Wells Fargo said that the recent drop in Visa's stock has removed much of the risk from the shares. The firm thinks that the stock could advance if the company reports in-line EPS and volume trends, or positive pricing developments. Wells, whose Q3 EPS estimate is 2c below the consensus, nevertheless maintained an Outperform rating on the shares.