Visa: Cheap at 28x P/E, After Double-Digit Growth Again in FY22

(Preview) Company Update (V US) (Buy)

Summary

• Visa shares are down 2.4% year-to-date. At a 28x P/E, we believe they are one of the best "blue chip" stocks today.

• Volumes and revenues have been growing consistently since an early 2020 trough; long-term double-digit annual growth is continuing.

• The most recent quarter saw both revenues and EPS growing by nearly 20% in dollars. News from the Fed and Brazil are reassuring.

• However, U.S. dollar earnings growth may be below 10% in FY23, especially in H1, due to currency, Russia, and acquisitions.

• With shares at $210.33, our forecasts indicate a total return of 108% (21.3% annualized) by September 2026. Buy.

Introduction

We review our investment case on Visa Inc., with share price back to where it was at our last update three months ago. We continue to believe Visa is one of the best “blue chip” stocks in today’s market.

Since we initiated our Buy rating on Visa in June 2019, shares have gained 32% (including dividends) in the roughly 3.5 years. Performance in 2022 has been more disappo…