Visa (V) is the worst Dow Jones stock Wednesday after the payments giant came up short on both the top- and bottom-lines in its fiscal third quarter.
In the three months ended June 30, Visa's revenue increased 10% year-over-year to $8.9 billion, driven by a 7% increase in payments volume, a 14% rise in cross-border volume and a 10% jump in processed transactions. Its earnings per share (EPS) rose 12% from the year-ago period to $2.42.
The company's strong quarter was helped by stability in its key business drivers, including processed transactions, said Visa CEO Ryan McInerney in a statement. "During the quarter, we expanded our partnerships with many clients around the world and announced several new innovations that will help drive the future of commerce."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Still, Visa's results fell short of analysts' expectations. Wall Street was anticipating revenue of $8.96 billion and earnings of $2.43 per share, according to Bloomberg.
On the Visa's conference call, Chief Financial Officer Chris Suh said the company expects payments volume and processed transactions to grow at a similar rate in the final quarter of its fiscal year, while cross-border volume is expected to be slightly lower.
"Pulling it all together, we expect adjusted net revenue growth in the low double digits, which equates to a slight improvement from the 10% adjusted revenue growth rate in the third quarter," Suh said. He added that earnings per share is forecast to grow "in the high end of low double digits."
Is Visa stock a buy, sell or hold?
Visa shares are in negative territory on a year-to-date basis, but Wall Street is bullish on the blue chip stock. According to S&P Global Market Intelligence, the average analyst target price for V stock is $304.58, representing implied upside of about 19% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm William Blair is bullish on Visa and thinks market participants should be buying the stock.
"We reiterate our Outperform [the equivalent of a Buy]rating and recommend investors allocate new investment dollars to Visa," William Blair analyst Andrew Jeffrey writes in a note to clients. "Our view remains that Visa is a core fintech holding, and we believe that the stock offers through-the-cycle outperformance and relative insulation from momentum-driven technology strategies."
Related Content
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Travel trends you can expect this summerThe Kiplinger Letter Domestic trips will trump foreign travel amid economic uncertainties, though some costs are down.
-
Donating Complex Assets Doesn't Have to Be Complicated
If you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
What's Next for Stocks After a Chaotic SpringA chaotic tariff policy buffets investors looking for clarity on the economy and inflation.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Where to Invest in an Uncertain MarketIn an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
My First $1 Million: Events Industry CEO, 65, Northern New JerseyEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Stock Market Today: Investors Look on the Bright SideA generally good week closes on another positive note, as investors, traders and speculators look for fresh catalysts.
