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This is Your Golden Opportunity to Buy Visa

NEW YORK ( TheStreet) -- The initial market reaction to Visa's (V - Get Report) 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.
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