Shares of Visa Inc (NYSE:V) rose on Wednesday, after the company reported its fiscal third-quarter results.
The outperformance was driven by healthy consumer spending trends and a favorable macro environment, according to Cantor Fitzgerald.
The Visa Analyst: Analyst Ramsey El-Assal reaffirmed an Overweight rating and price target of $410.
The Visa Thesis: The company reported a “healthy” revenue beat, with Data Processing and other revenues topping Street expectations, El-Assal said in the note.
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He highlighted the following from Visa’s quarterly results:
- Net revenues of $11.633 billion, above consensus of $11.396 billion.
- Adjusted EBIT of $7.755 billion, surpassing Street’s $7.597 billion estimate.
- Adjusted earnings of $3.32 per share, beating expectations of $3.23 per share.
Management raised their full-year revenue growth outlook, while maintaining its adjusted operating expenses and earnings guidance, the analyst stated.
Visa provided fresh guidance for the fiscal fourth quarter, including:
- Low double-digit to low-teens net revenue growth
- High end of low double-digit growth in adjusted operating expenses.
- Mid-teens adjusted earnings growth.
Softer trends so far this quarter may be weighing on shares, “but we attribute the deceleration to transitory factors,” including the timing of Amazon.com Prime Day, a less-favorable calendar and mix versus June, and lower fuel prices, “rather than a deterioration in underlying spending trends,” El-Assal wrote.
The analyst added that Visa’s stock has risen around 19% over the past three months, outperforming the 4% rise in S&P 500, making incremental upside even more difficult.
V Stock Price Activity: Visa shares were up 1.54% at $372.25 on Wednesday, according to Benzinga Pro data.
