Visa: Strong Q1 FY22 & Raised Outlook Indicate 15%+ EPS Growth
(Preview) Company Update (V US) (Buy)
Summary
Visa delivered strong Q1 FY22 results overnight, sending shares up 8.8% (as of 12:20 EST) and showing a resumption of its multi-year compounding.
Global volume rebounded 20% year-on-year, Omicron's effect is proving short-lived, and Visa is gaining from Buy Now Pay Later.
Visa had a year-on-year growth of 24% in Net Revenues and 28% in EBIT during the quarter; $4.1bn of shares were repurchased.
Management raised their FY22 outlook, which implies a 15%+ EPS growth. Visa shares are trading at 33.5x CY21 EPS.
With shares at $213.00, we expect a total return of 98% (20.6% annualized) by September 2025. Buy.
Introduction: Why is Visa Stock Up?
Visa Inc. released their Q1 FY22 results overnight (January 27). Shares are currently up 8.8% in New York (as of 12:20 EST).
We initiated our Buy rating on Visa (along with Mastercard) in June 2019. Since then Visa shares have gained 32.8% (including dividends) in 2.5 years; compared to the start of 2021, they have been broadly flat, having fallen 16…