On Thursday, Mizuho made an adjustment to the price target of Visa Inc . (NYSE:V), raising it to $275 from the previous figure of $265. The financial services company's rating remains at Neutral following the update of its fiscal year 2024 guidance.
Visa's recent financial performance and the updated outlook for the next year have prompted Mizuho to revise its revenue and earnings per share (EPS) estimates upward. The firm now values Visa at approximately 25 times its projected fiscal year 2025 EPS, an increase from the earlier valuation of around 24 times. This change is attributed to Visa's stronger than anticipated results.
The new price target of $275 reflects a premium valuation compared to the median of the legacy payments group. However, it also indicates a modest discount relative to Visa's peer, Mastercard (NYSE:MA). The rationale behind this positioning involves Visa's higher mix of U.S. debit transactions, which Mizuho suggests could face more significant long-term disruption compared to credit and transactions in the rest of the world (ROW).
Visa's updated financial outlook and the subsequent changes in valuation metrics by Mizuho highlight the company's current market position and expectations for its future performance. The revised price target is a result of these updated assessments and the financial institution's analysis of industry comparisons.
InvestingPro Insights
Following Mizuho's updated price target on Visa Inc. (NYSE:V), the financial services giant is also under the lens of InvestingPro. With a market cap of a staggering $535.15B, Visa stands as a prominent player in the Financial Services industry, a status that is further cemented by its impressive gross profit margin of 97.81% over the last twelve months as of Q2 2024. This level of profitability is indicative of Visa's strong position in the market and its ability to maintain high margins.
InvestingPro data further reveals that Visa's revenue growth for the same period was 10.19%, showcasing the company's ability to increase its earnings and pointing towards a positive trajectory for future financial performance. This aligns with the rationale behind Mizuho's revised price target, as Visa's financials continue to exhibit strength.
InvestingPro Tips highlight that Visa has maintained dividend payments for 17 consecutive years, reflecting its commitment to returning value to shareholders. Additionally, the company is trading at a high Price / Book multiple of 13.78, which may suggest a premium valuation in the market.
For investors seeking a deeper dive into Visa's financials and future prospects, InvestingPro offers additional tips and insights. Currently, there are more tips available that could provide valuable context and guidance for potential investment decisions. To access these insights and enhance your investment strategy, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at https://www.investing.com/pro/V.
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