Visa Moves Down by a Notch - Analyst Blog


On Jun 26, 2013, Zacks Investment Research lowered Visa Inc. ( V ) by a notch to a Zacks Rank #3 (Hold).

Why the Downward Movement?

Recently, the positive momentum in Visa's earnings estimates lost steam. The Zacks Consensus Estimate for the company's 2013 earnings increased only 2 cents to $7.48 per share over the last 30 days, while it had gained 11 cents in the previous 30-day period.

Moreover, only 2 out of 24 analysts revised their estimates for Visa upward in the last 30 days, while 1 analyst revised it downward. In comparison, 21 out of 24 analysts revised their estimates in the last 60 days. These figures clearly indicate the slowdown in the positive momentum of the earnings estimate.

Moreover, Visa's growth is expected to remain sluggish in 2013 compared to 2012 and 2011. This is reflected in its top-line growth guidance of low double digits and lower bottom-line growth as compared with fiscal 2012. High competition, increasing regulatory compliances and higher-than-expected litigation charges are other headwinds.

However, despite these negatives, we are not bearish on Visa due to its strong brand value, strong balance sheet, efficient capital deployment through acquisitions and alliances, and the increasing demand for electronic payment services. Moreover, Visa continues to grow organically through a healthy product boutique and huge network.

Other Stocks to Consider

Other financial transaction services companies worth considering are Vantiv, Inc. ( VNTV ) - Zacks Rank #1 (Strong Buy), Equifax Inc. ( EFX ) - Zacks Rank #2 (Buy) and Fidelity National Information Services, Inc. ( FIS ) - Zacks Rank #2 (Buy).

EQUIFAX INC (EFX): Free Stock Analysis Report

FIDELITY NAT IN (FIS): Free Stock Analysis Report

VISA INC-A (V): Free Stock Analysis Report

VANTIV INC-A (VNTV): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: EFX , FIS , V , VNTV

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