As Facebook Inc. swims in criticism over its new efforts in cryptocurrency, one of the stalwarts of payments continue to thrive. Visa Inc. shares hit a new all-time high last week, and the card company will be looking to show that it remains on the cutting edge of digital payments when it reports earnings next Tuesday afternoon.
What to expect
Earnings: Analysts surveyed by FactSet expect Visa V, -0.71% to report adjusted earnings per share of $1.32, up from $1.20 a year earlier. According to Estimize, which crowdsources projections from hedge funds, academics and others, the average estimate calls for $1.37 in EPS.
Visa has beaten the FactSet EPS consensus in the past 14 quarters.
Revenue: The FactSet consensus calls for $5.7 billion in revenue, while the Estimize consensus projects $5.8 billion. A year prior, Visa reported $5.2 billion in revenue.
Stock movement: Visa shares have risen following six of the company’s past 10 earnings reports. The stock has gained 36% so far this year, as the Dow Jones Industrial Average DJIA, -0.25% has climbed 17%. Of the 39 analysts tracked by FactSet who cover Visa’s stock, 35 rate it a buy, three call it a hold, and one rates it a sell. The average price target is $186.92, 4.2% above current levels.
What else to watch for
Analysts see positive indications for the card companies coming out of recent bank earnings. Barclays’ Ramsey El-Assal points to JPMorgan Chase & Co.’s JPM, -0.99% and Wells Fargo Corp.’s WFC, +0.46% accelerating purchase-volume growth, which along with “other leading indicators similarly point to a broadly healthy spending environment in the U.S.”
El-Assal has an overweight rating and $170 target price on Visa shares.
Wedbush analyst Moshe Katri expects Visa to benefit from recently announced mega-mergers between merchant issuers and processors, which management