NEW YORK (TheStreet) -- Shares of Visa (V) - Get Report closed down 0.38% to $65.41 in trading on Tuesday after Deutsche Bank's cut its price target 75% to $79 from $316, while maintaining its "buy" rating.
"Visa will continue to use pricing from time to time, but appears to be backing off the strategy of charging token fees," analysts said, adding that it doesn't appear eager to roll out new card present rates for ecommerce and in-app mobile transaction.
Deutsche Bank said that Visa continues to view tokenization as a means to reinforce Visa's position in the payments value-chain and increase its share of processing transactions.
The company plans to roll out tokenization internationally in April and ecommerce tokenization has been delayed a few months, the firm noted.
"Early results for Visa Checkout have been encouraging and management was upbeat about its prospects driving share gains versus the competition, especially eBay's (EBAY) - Get Report PayPal," analysts said, adding that Visa and the banks want to force PayPal away from ACH (Automated Clearing House) and push more transactions over to the networks generating additional interchange.
On winning the Costco (COST) - Get Report deal, Visa has called it going far beyond the economics it receive from Costco, considering the uniqueness of the exclusivity of the deal, as well as the size/importance of the Costco opportunity, Deutsche Bank noted. Costco is now one of Visa's largest merchants.
Analysts reduced their 2015 fiscal year earnings to $2.60 per share from $10.38 per share.
Insight from TheStreet's Research Team:
Sham Gad commented on Visa in a recent post on RealMoney.com. Here is what Sham had to say about the stock:
Looking into the future, I believe the tollbooth businesses of today and tomorrow are perfectly demonstrated in two companies: MasterCard and Visa, the two dominant credit-card processing companies. Most consumers see the two companies as credit-card companies when in fact they are not. They are payment-processing companies. Visa and MasterCard control the world's two dominant payment-processing systems. They make money on that payment infrastructure by branding their names on credit cards issued by other businesses. Every time a card bearing either logo is swiped, MasterCard and Visa collect a fee, very similar to the tolls I paid on the highway.
Want more information like this from Sham Gad BEFORE your stock moves? Learn more about RealMoney.com now.
Separately, TheStreet Ratings team rates VISA INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate VISA INC (V) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, growth in earnings per share, increase in net income and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
You can view the full analysis from the report here: V Ratings Report