Visa: Up 15% Year-To-Date, With More Upside to Come

Company Update (V US) (Buy)

Highlights

• Shares have risen 15% YTD to be at 30x CY22 EPS

• We expect a 14% EPS CAGR and re-rating to 35x P/E

• Q3 FY23 should see few surprises; consumer is resilient

• Recent events show there are few risks except governments

• At $237.97, we see 91% upside (22.3% p.a.) by Sep-26. Buy

Introduction

We review our Buy rating on Visa ahead of Q3 FY23 results scheduled for July 27 (post-market), and after Visa’s share price has risen 15% year-to-date to reach a new 52-week high.

We believe Visa shares still offer the potential of a 20%+ annualized return by September 2026, driven by an approximately 14% EPS CAGR and its P/E re-rating from 30x to 35x. H1 FY23 results and management outlook imply Adjusted EPS will grow by 14% in FY23. Transaction volume has already been disclosed for 2 of the 3 months in Q3 FY23, Q3 results should be in line with expectations, though there may be some non-operational headwinds from currency and a tax hike in Brazil. The U.S. consumer continues to be resilient. Visa’s “ne…