Visa's disappointing outlook weighs on rival Mastercard, credit card stocks

Oct. 27, 2021 1:11 PM ETVisa Inc. (V), MAGPN, COF, FISV, BFH, DFS, SYFBy: Liz Kiesche, SA News Editor48 Comments

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  • Credit card networks and issuer stocks drop after Visa (V -5.4%) said it doesn't expect cross-border travel to return to 2019 levels until the summer of 2023.
  • The company expects Q1FY2022 net revenue growth in high teens, with client incentives as a percentage of gross revenue likely in the 26-27% range, in line with Q4FY2021, Vice Chairman and CFO Vasant Prabhu said during the company's earnings call.
  • "Looking four quarters out projecting growth, revenue growth poses the greatest challenge, and is significantly dependent on the pace of the cross-border travel recovery," as well some other factors, he said.
  • Rival card network Mastercard (MA -6.2%) also dips in early afternoon trading.
  • Card issuers Capital One Financial (COF -7.5%), Alliance Data Systems (ADS -5.7%), Discover Financial (DFS -5.3%), and Synchrony Financial (SYF -3.5%) feel the pain as well.
  • Also caught up in the downdraft are payment processors Fiserv (FISV -12.2%), which reported better-than-expected Q3 adjusted EPS earlier today, and Global Payments (GPN -8.3%).
  • Also of interest to financial stocks, Longer Treasury yields sink, 10-year drops to two-week low below 1.55%

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