This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

This is Your Golden Opportunity to Buy Visa

Stocks in this article: V MA

NEW YORK ( TheStreet) -- The initial market reaction to Visa's (V) earnings report was negative, but this could be an excellent time for investors to scoop up some of the payment processor's shares.

Shares of Visa were down 3% in afternoon trading Thursday to $197.91, after the company late on Wednesday reported earnings of $1.192 billion, or $1.85 a share for its fiscal fourth-quarter ended Sept. 30. Earnings were down from $1.662 billion, or $2.48 a share a year earlier, however, the prior year's earnings included special items that boosted earnings by $627 million, or 93 cents a share. On an adjusted basis, earnings grew from $1.035 billion or $1.54 a share, a year earlier.

Visa's fiscal fourth-quarter operating revenue totaled $2.731 billion, increasing 15% from $2.383 billion a year earlier.

Fiscal fourth-quarter EPS matched the consensus estimate among analysts polled by Thomson Reuters, however, revenue came in below the estimate of $3.02 billion, which is probably what is driving the decline in the shares.

Visa said "The strengthening of the U.S. dollar impacted net operating revenues by approximately 1.5 percentage points of negative growth in the fiscal fourth quarter."

Service revenue was up 10% year-over-year to $1.385 billion in the fiscal fourth quarter, while data processing revenue was up 12% to $1.186 billion. These improvements were partially offset by an increase in client incentives to $680 million in the most recent quarter from $563 million a year earlier.

Visa's guidance for fiscal 2014 includes earnings-per-share growth in the "mid to high teens," reflecting continued share repurchases. The company bought back $1.3 billion in Class A common shares during the most recent quarter and on Wednesday announced a new $5 billion buyback program.

The company's guidance for fiscal 2014 also includes revenue growth in the "low double-digits," with a negative effect of 2% for "foreign currency impact."

Reaction among sell-side analysts was mixed, however, analyst sentiment is generally positive, with 23 of 34 analysts polled by Thomson Reuters rating Visa "buy," while the remaining 11 analysts have neutral ratings.

"Visa noted reduced purchase volume for the months of September/October, presuming a tepid spending outlook for the balance of the year as US economic recovery materializes," according to Deutsche Bank analyst Bryan Keene, who rates Visa a "buy," with a $226 price target. Keene estimates Visa will earn $8.84 a share in fiscal 2014, increasing from a reported $7.59 a share for fiscal 2013.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs