When Visa Inc. reports earnings after Tuesday’s closing bell, investors will be keen on hearing the financial-technology giant’s outlook for the year ahead. As Visa’s fiscal year just concluded, the upcoming report is expected to include a new annual outlook.
Forecasting consumer spending for the upcoming year is always a challenge, but the current environment is particularly uncertain. Investors anticipate Visa’s management to provide a conservative forecast, according to Barclays analyst Ramsey El-Assal.
Expectations for Visa’s Fiscal Fourth-Quarter Report
Earnings: Analysts tracked by FactSet expect Visa to report adjusted earnings per share of $2.25, compared to $1.93 in the same period last year.
Revenue: The FactSet consensus calls for $8.56 billion in revenue for the September quarter, representing an increase from the $7.79 billion recorded in the previous year.
Stock Movement: In the previous two earnings reports, Visa’s shares experienced a slight drop. However, in the two quarters preceding those, they saw larger gains. Overall, the stock has seen an 11% increase this year.
With all eyes on Visa’s earnings report, it’s crucial to closely monitor these key factors and track their impact on the financial-technology giant’s performance.
According to analysts, Visa’s stock has long been considered a safe haven. However, with the upcoming earnings announcement, some may question whether it remains a risky play.
Mizuho analyst Dan Dolev
According to Mizuho analyst Dan Dolev, the analysis of Visa’s total revenue compared to US personal consumption expenditures indicates that there may be overly optimistic macroeconomic expectations, continued high inflation in FY24, or an improvement in Visa’s ability to capture consumer spend. Dolev expects that Visa’s revenue guidance for the fiscal year will fall short of consensus expectations. As a result, Dolev has slightly lowered the estimated revenue growth for FY24 to 9.7%, which is lower than the market consensus of 10-11%.
Barclays analyst Ramsey El-Assal
Barclays analyst Ramsey El-Assal anticipates that Visa’s results will align with expectations. However, all eyes are on Visa’s FY24 guidance. El-Assal believes that market expectations are gradually becoming more accurate, with investors converging around a “high-single-digit” revenue guide for FY24. El-Assal suggests that investors already anticipate some caution from the company and have factored this into their valuation of Visa’s shares.
Baird analyst David Koning
Baird analyst David Koning highlights Visa’s high-quality earnings, favorable pricing environment, and promising growth prospects. However, Koning recognizes that near-term sentiment towards the stock may be constrained by concerns such as a potential below-market guidance for FY2024, a slowdown in cross-border travel, regulatory uncertainties, and macroeconomic factors.
Morgan Stanley analyst James Faucette
Morgan Stanley analyst James Faucette maintains the expectation that both Visa and Mastercard (V/MA) can achieve modest upside from the ongoing strength in international travel. Faucette points to positive indications from airline commentary, which suggests strong trends in long-haul flights and bookings.
Peer Mastercard Inc. Reports Earnings
Peer Mastercard Inc. is set to report its earnings before Thursday’s closing bell. This announcement follows American Express Co.’s recent release of its own financial results, in which it pointed out robust spending dynamics.
Stay tuned for the latest updates on Peer Mastercard Inc.’s performance in the market.