On Wednesday, Barclays (LON:BARC) reaffirmed its Overweight rating on shares of Visa Inc . (NYSE:V) with a steady price target of $319.00. The credit card giant reported a slight miss in its fiscal third quarter results, with net revenues coming in at $8.9 billion, slightly below the anticipated $9.0 billion.
The adjusted EBIT was reported at $5,973 million, marginally missing the $6,017 million expected by the Street. Similarly, adjusted earnings per share (EPS) were $2.42, just shy of the forecasted $2.43.
Visa's performance in the quarter was partly buoyed by its Other Revenues segment, particularly within Value Added Services (VAS), although some areas of consumer spending showed signs of weakness. The company also released its forecast for the fiscal fourth quarter, projecting low double-digit (LDD) net revenue growth, which compares to the Street's estimate of around 11%.
Moreover, Visa anticipates high single-digit (HSD) growth in operating expenses, compared to predictions of approximately 12%, and expects EPS growth to be at the high end of the LDD range, versus expectations of around 10%.
For the fiscal year 2024, Visa's management has slightly adjusted its expectations for operating expenses, moving from high single-digit to low double-digit growth, while maintaining its previous revenue and EPS forecasts. The company attributed softer-than-expected month-to-date metrics to one-off factors such as adverse weather conditions and technology outages, rather than any fundamental shifts in consumer spending habits.
Despite the company's consistently positive and consistent intra-quarter commentary, the analyst noted that some investors might feel underwhelmed by the recent volume trends. Consequently, the stock is anticipated to experience a modest decline following the announcement of these results.
In other recent news, Visa Inc. experienced a revenue shortfall in the third quarter, leading to several Wall Street brokerages, including Mizuho and TD Cowen, revising their price targets downward. This development follows concerns about a slowdown in consumer spending and potential implications for the broader U.S. payments industry.
Analysts from Jefferies and Raymond James expressed a cautious outlook, indicating potential limited movement for Visa shares in the coming months. However, Piper Sandler maintained an Overweight rating on Visa, albeit with a slight reduction in the price target to $319.
On the other hand, Goldman Sachs (NYSE:GS) reiterated its Buy rating on Visa, maintaining a steady price target of $317.00, citing the company's resilience despite some volume softness. Visa's Value-Added Services (VAS) and New Flows revenue saw year-over-year increases of 23% and 18%, respectively, indicating areas of robust growth.
Despite facing challenges, Visa remains optimistic about future growth opportunities, particularly in consumer payments, new flows, and value-added services. These recent developments shed light on the company's current financial trajectory, as well as the broader economic environment in which it operates.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.