Visa: Color on Quarter
- V down 4% premarket testing support near the $78 level; peer MasterCard (MA) is down 3%.
- Compass Point notes The quarter was in line given V's operating leverage, though a combination of a more cautious macro outlook and the delayed closing of the Visa Europe deal will temper enthusiasm and likely push estimates lower. They are Hold-rated on V for the following reasons: (1) a mixed global spending backdrop that could temper volume and transaction growth in many markets, (2) full valuation vs. historical levels that suggests limited near-term upside in the stock, and (3) potential estimate upside driven by FX and the pending Visa Europe acquisition that could offset some of the near-term negatives.
- RBC notes that while Visa reported FQ2/16 results that were essentially in line on the top line and above on the bottom line ($0.02 in EPS or 3% of forecast), mgmt reduced guidance due to continued pressure on cross-border growth and economic conditions in certain countries. Additionally, the co amended its agreement to acquire Visa Europe in response to comments from the European Commission and cautioned that closing could extend beyond management's original timeline; $87 tgt.