V News Today Why did Visa stock go down today?

The deal would have given Visa a virtual monopoly in the online debit space, according to DOJ prosecutors. Plaid’s service was viewed by the DOJ as a cheaper, innovative alternative that had the potential to become a threat to Visa. Visa dismissed these allegations, though the company did drop the deal following the suit. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. We expect an in-line return from the stock in the next few months. For nine months ended Jun 30, 2021, net cash provided by operating activities improved 34.9% from the year-ago comparable period to $11.3 billion.

MarketRank is calculated as an average of available category scores, with extra weight given to analysis and valuation. There’s absolutely no doubt in my mind that Visa is a great company. Its price-to-earnings https://forex-world.net/stocks/boeing/ ratio is 31.6; the S&P 500’s is around 19.6, and American Express and Discover are about 17.8 and 7.8, respectively. Viewed in that light, it’s no wonder investors are disappointed today.

Overall Assessment for Visa

The heart of the issue is whether Visa used anticompetitive practices in the debit card market by limiting merchants’ ability to route transactions over other card networks even if they were less expensive. In my view, Visa’s a world-class company with staying https://trading-market.org/swfx-sentiment-index/ power. However, as with other companies in dominant monopoly-like market positions, a buy-the-dip mentality has generally proven to be prudent. On a constant-dollar basis, the company’s total cross-border volume improved 47% year over year in the quarter.

It is also a technology company that facilitates payments and processing, including authorization, clearing, settlement and related financial services products. It has also been a huge beneficiary of the on-going shift to digital and electronic payments as the company processed nearly $5 trillion in purchase transactions during 2020. Together Visa and Mastercard dominate the global payment space with a combined 45% market share as of 2019. Given that UnionPay dominates payments with 99.5% of its business in China I would be inclined to agree with analysts who state that Visa and Mastercard effectively have a duopoly in the global payments space (ex China). Visa Inc needs little introduction as a global payments technology company that operates worldwide.

Mastercard Fundamentals and Analyst Forecasts

Reflecting transactions processed by Visa, the company’s processed transactions grew 39% year over year to 42.6 billion courtesy of domestic transactions. For fiscal 2023, two analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.01 to $8.59. Visa declared that its Board of Directors has approved a share repurchase program on Tuesday, October 25th 2022, which authorizes the company to repurchase $12,000,000,000.00 in outstanding shares, according to EventVestor. This repurchase authorization authorizes the company to purchase up to 3.1% of its shares through open market purchases. Shares repurchase programs are usually a sign that the company’s board believes its stock is undervalued.

In the quarter under review, the company bought back shares worth $2.2 billion. A month has gone by since the last earnings report for Visa (V Quick QuoteV – Free Report) . Shares have lost about 5.8% in that time frame, underperforming the S&P 500. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.

The Zacks Analyst Blog Highlights Visa, UnitedHealth Group, Eli Lilly, Costco, Wholesale and Advanced Micro Devices

Its cross-border volume, excluding transactions within Europe, usually bolsters the company’s international transaction revenues. The metric surged 53% year over year on a constant-dollar basis. Payments volume of Visa on a constant-dollar basis climbed 34% year over year in the third quarter.

Since then, shares have increased 154.09% to $240.55. The payment processing group ranks No. 56 out of 197 industry groups tracked by IBD. You have already added five stocks to your watchlist.

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Those shopping for electronics might want to postpone their purchase for Black Friday and Cyber Monday, too — gaming consoles tend to be cheaper then. Other notable price cuts during the holidays include toys, kitchen supplies and dinnerware. The DOJ investigation into Visa needs to be watched as does the recent weakness in the payments space. Visa looks to have formed a base at just over $200 and presents a good risk reward scenario from here. There’s more to this story than its ubiquitous brand though – I intend to show why Visa is an established market leader that still enjoys strong growth prospects.

• Data processing revenues jumped 10% to $3.82 billion, slightly lower than views for $3.77 billion.
• South Africa literally dropped this bombshell on the markets just as American consumers were digging into their Thanksgiving turkeys Thursday, and fueling up to go out and begin their Black Friday shopping.
• But Visa’s relative strength line is trending downwards.
• It also facilitates global commerce through the transfer of value and information among a global network of consumers, merchants, financial institutions, businesses, strategic partners, and government entities.

Moreover, analysts are expecting Visa’s earnings to grow 14.5% for the current fiscal year. On March 29, Visa said it would become the first major payments network to settle transactions in USD Coin, a stablecoin backed by the U.S. dollar, over Ethereum. Visa has posted eight straight quarters of sales and earnings gains. International transaction revenue surged 24% to $2.75 billion, just above forecasts of $2.73 billion.

The new Visa Inc held its IPO in 2007, selling half of its shares, raising nearly $18 billion or almost double the targeted amount. Visa Europe was later acquired by Visa Inc, forming the unified company traded today. And if so, there’s a greater likelihood that Visa is going to miss its revenue estimate when Visa’s next earnings report rolls around.

I mean, on the one hand, sure, coronavirus couldn’t have picked a worse time to rear its ugly head again. South Africa literally dropped this bombshell on the markets just as American consumers were digging into their Thanksgiving turkeys Thursday, and fueling up to go out and begin their Black Friday shopping. Visa is ranked No. 3 in IBD’s industry group ranking of credit card and payment processors, behind No. 1 Shift4Payments (FOUR).

Price Target and Rating

However, claims that merchants have had difficulty routing transactions through competing networks has led to what are believed to be higher network fees. Additionally, the probe is looking at financial incentives that Visa provides to banks issuing cards on its network. Whether such incentives encourage routing of transactions on Visa’s network as opposed to its competitors remains to be seen.

Visa has been an outstanding investment, and everyone already knows how wonderful a company it is. So, its shares are rarely trading at a meaningful discount. As of this writing, they sell for a price-to-earnings (P/E) ratio of 31.7. And in the last 10 years, the stock’s average P/E multiple https://currency-trading.org/education/bullish-and-bearish-chart-patterns/ was 33.5. Realizing that it doesn’t need a lot of capital to grow, management has done a good job returning cash to shareholders. Visa’s current dividend yield of 0.72% might not be impressive, but the business has consistently increased the quarterly payout since going public in 2008.