Data from the U.S. Commerce Department showed that non-store sales (better known as e-commerce) reached $48.9 billion on a seasonally adjusted basis in December. That's up from $43.3 billion in December 2015, indicating nearly 13% growth year-over-year, a sign that bodes well for credit-card processors.
Jefferies analyst Jason Kupferberg noted the recent strength that shares of Visa and MasterCard (MA) - Get Report have seen since the start of the year may be a sign of optimism surrounding earnings and that it's business as usual for the San Francisco-based financial technology company.
"Based on our analysis of leading indicators, we share this positive view, and are comfortable owning with the stocks into earnings, but aren't expecting the prints to be big catalysts," Kupferberg wrote to clients. "Our modest preference remains with V, given F17 tailwinds and relative valuation." Jefferies has a buy rating and a $93 price target on Visa.
Kelly -- who took over for former CEO Charlie Scharf -- came from American Express (AXP) - Get Report , where he was group president of U.S. Consumer and Small Business Services. Wall Street is expecting him to settle into his new role and not alter too far from his predecessor's strategy.
"We would be surprised to see V alter guidance so shortly after providing initial F17 expectations on their October earnings call, and we expect management will aim to remain conservative for the first quarter under new CEO Al Kelly, especially following last year's guidedown," Wedbush Securities analyst Moshe Katr wrote in a note previewing earnings.
Analysts surveyed by Yahoo! Finance expect the company to earn 78 cents a share on $4.29 billion in revenue for the fourth quarter.
Over the past 12 months, shares of Visa gained nearly 13% excluding dividends, compared to the near 19% gain in the S&P 500.
Here are three ETFs that may benefit if investors like Visa's first-quarter results.
iShares U.S. Financial Services ETF
Oppenheimer analyst Glenn Greene, who has a $95 price target on Visa, noted it's trading at attractive levels, despite the recent run up since the start of the year. "We prefer V relative to MA at present given V's slightly depressed valuation, the U.S. volume boost from the Costco/USAA wins, and accretion benefits from the Visa Europe acquisition," Greene wrote to clients ahead of earnings.
PureFunds ISE Mobile Payments ETF
Jefferies's Kupferberg highlighted recent SpendTrend results and consumer spending trends (PCE and retail sales), which all accelerated from the third quarter, noting these were encouraging signs.
iShares U.S. Financials ETF
Goldman Sachs analyst James Schneider believes that Visa will "deliver a solid print," thanks in part to "stable retail trends in Europe and the US, as well as Visa Europe, partly offset by FX headwinds (250bps)."
Two areas of strength have been positive volume trends from J.P. Morgan JPM, as well as Costco COST, Schneider noted. Goldman Sachs has a buy rating and a $96 price target on Visa.