Visa: More Boring Double-Digit EPS Growth in Q1 FY24

Company Update (V US) (Buy): EPS grew 10.8% in Q1 and is expected to grow by low-teens in FY24; P/E is 30.7x.

Highlights

• EPS grew 10.8% in Q1 FY24, backed by the usual drivers

• Some datapoints looked weaker, but explained by one-offs

• FY24 outlook is for EPS to grow by low-teens

• Shares are at 30.7x CY23 EPS and have a 3.2% FCF Yield

• At $279.39, we see 63% upside (20.3% p.a.) by Sep-26. Buy

Introduction

We review our Buy rating on Visa, following Q1 FY24 results on January 25; we last published an update in July 2023.

Visa shares have gained a further 18% (including dividends) since our last update, finishing 2023 with a gain of 26% during the year and gaining another 7% in 2024 year-to-date. Compared to when we first published our research online with a Buy rating in June 2019, shares now gained 76% in less than 5 years:

Visa Share Price (Last 5 Years)

Source: Google Finance (07-Feb-24).

We believe Visa continues to be an attractive stock; it is currently ranked #1 in our “Select 15” model portfolio (reflecting the best risk/reward overall, though not necessarily the highest return in base case scenarios.)