On Wednesday, Deutsche Bank maintained a Buy rating on Visa (NYSE:V) and raised its price target to $340 from the previous $300.
The adjustment follows Visa's announcement of strong fourth-quarter 2024 results, which included approximately $9.6 billion in revenue, marking a 12% growth on a constant currency basis, and an adjusted earnings per share (EPS) of $2.71. These figures surpassed the estimates that were set before the earnings release.
Visa's performance in the quarter showed consistent volume growth domestically, in both credit and debit transactions, as well as in cross-border activity. The company has also observed a slight acceleration in growth for October month-to-date, attributed to the mix of days and the annual lapping of the Regulation II impact.
Looking forward, Visa has guided for fiscal year 2025 net revenue growth in the high single to low double digits, aligning with a previously indicated 10% growth target, and anticipates adjusted EPS growth at the higher end of the low double digits.
The payments giant is currently undergoing a restructuring effort that will affect 1,400 employees. However, the savings from this move are expected to be reinvested into new hiring and growth initiatives.
Deutsche Bank views the fourth-quarter results and the fiscal year 2025 guidance as further evidence of Visa's robust business model and potential for increased volume and growth, especially with a potential economic recovery on the horizon.
Furthermore, Deutsche Bank has reiterated its fiscal year 2025 EPS estimate for Visa, while slightly reducing the fiscal year 2026 EPS projection by $0.02 to $12.79. The firm has also introduced a fiscal year 2027 EPS estimate of $14.59.
The raised price target to $340 is a reflection of the analyst's confidence in Visa's solid fundamentals, which are expected to strengthen over the coming years. Visa has also announced an Investor Day scheduled for February 20, 2025, where a longer-term outlook will be provided.
In other recent news, Analysts from Citi, Baird, and Jefferies have maintained a positive stance on Visa, raising the company's price target and maintaining Buy and Outperform ratings.
Meanwhile, UBS has removed Visa from its U.S. Top Picks list, citing them as more defensive stocks. These are the recent developments for Visa Inc (NYSE:V).
InvestingPro Insights
Visa's strong financial performance, as highlighted in the article, is further supported by real-time data from InvestingPro. The company's market capitalization stands at an impressive $536.24 billion, underscoring its position as a prominent player in the Financial Services industry. This aligns with one of the InvestingPro Tips, which notes Visa's significant role in the sector.
The company's revenue growth of 9.7% over the last twelve months, coupled with a robust gross profit margin of 97.8%, demonstrates Visa's ability to maintain profitability while expanding its business. This is particularly relevant given the article's mention of Visa's guidance for fiscal year 2025 net revenue growth in the high single to low double digits.
Additionally, InvestingPro Tips reveal that Visa has raised its dividend for 16 consecutive years and maintained dividend payments for 17 consecutive years. This consistent dividend growth, coupled with a current dividend yield of 0.74%, reflects the company's strong financial health and commitment to shareholder returns. The dividend growth of 15.56% in the last twelve months further supports Deutsche Bank's positive outlook on Visa's business model and growth potential.
It's worth noting that InvestingPro offers 9 additional tips for Visa, providing investors with a more comprehensive analysis of the company's financial position and future prospects.
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