NEW YORK (TheStreet) -- Shares of Visa (V) - Get Report were retreating in late-morning trading on Tuesday as Guggenheim reduced its rating on the stock to "neutral" from "buy" after the credit card company reported earnings late yesterday.
The firm has an $89 price target on the stock.
Visa late yesterday posted better-than-expected results for the 2016 fiscal fourth quarter, but Guggenheim analysts said the results did little to improve the firm's valuation, Barron's reports.
"F4Q16 results beat forecasts partially on the basis of strong volume and revenue growth and lower core operating expenses offsetting higher incentive costs," the firm noted. "However, our FY2017 EPS is almost unchanged at $3.30, and we're introducing a FY2018 EPS of $3.85."
Guggenheim views Visa's risk/reward ratio as balanced.
Visa said in its earnings call late yesterday that it expects mid-teens earnings growth in 2017, which Deutsche Bank analysts said "appears conservative."
The firm has a "buy" rating and $103 price target on shares of Visa.
Deutsche Bank noted that Visa's forecast for 16% to 18% revenue growth in 2017 was also below the firm's estimates of a 20% increase.
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Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
The team rates Visa as a Buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. The team feels its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: V