Visa: Continuing Recovery Brings Double-Digit Annualised Return (NYSE:V)

Introduction

We review Visa (V) (Buy-rated in our coverage) ahead of FY20 results on October 28, referencing last quarter’s results, recent volume data and management comments.

Since our initial Buy rating in June 2019, Visa shares have returned 25.3% (including dividends), slightly ahead of the S&P 500, behind Mastercard (MA) (Buy-rated) and PayPal (PYPL) (also Buy-rated), but far ahead of American Express (AXP) (Neutral-rated):

Stable Year-on-Year Volume Trends

The last set of Visa volume data was for August, which showed stable year-on-year trends in U.S. payments, with a 7% year-on-year growth (8% in July):

Debit card volume continues to lead the recovery, partly due to consumers using their debit cards in purchases that were previously made with cash withdrawn from ATMs. The year-on-year decline in Card Present decelerated slightly in late August, but volume was still down high-single-digits. Card Not Present (Excluding Travel) volume remained at 30% higher year-on-year.

Outside

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