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Visa, Inc. (V) saw a slowdown in growth in 2021 but still progressed up the WhaleWisdom Heatmap to a ranking of ten. Visa saw its stock rise by approximately 7.9% to date, and overall, the company underperformed the S&P 500’s gain of about 46.7%.

Visa is a financial services company that connects banks, governments, and various consumers and businesses through electronic payments. Visa facilitates electronic fund transfers and offers company-branded credit, debit, and pre-paid cards. Visa serves as an intermediary between merchants and financial institutions, generating most of its revenue from fees collected from financial institutions using its network. During the coronavirus pandemic, Visa has faced challenges such as fluctuations in transaction volume as consumer spending habits changed and the need to process a higher volume of disputed credit card charges. In the early stages of the pandemic, travel bans and stay-at-home orders dramatically curbed spending. They resulted in canceled vacations, business trips, and events that brought disputed credit charges by consumers and credits to Visa cardholders extended by some merchants. Visa continues to be a powerful force in commerce, particularly e-commerce, and the company has shown support for its customers by waiving many pandemic-related fees.

Hedge Funds Are Buying

Visa saw positive third-quarter activity from hedge funds, who increased their aggregate 13F shares held to approximately 427.6 million from about 422.9 million, a change of about 1.1%. Of hedge funds, 24 created new positions, 221 added to an existing one, 40 closed out their stakes, and 205 reduced their holdings. In contrast, institutions decreased their aggregate holdings to approximately 1.56 billion from 1.57 billion, a reduction of about 1.1%. Also, 13F metrics between 2006 and 2021 suggest that Visa remains on an upward path, with strong long-term investment potential for this global processor of digital payments.


Favorable Outlook

While many financial service companies have been taking a hit during the pandemic, analysts are encouraged by the recent nomination of Jerome Powell for a second term as the Chair of the Federal Reserve. Visa has faced challenges from a current dispute over credit card fees with Amazon that has impacted its stock. Still, CFO Vasant Prabhu reported in November that he expects to reach a resolution with Amazon in the United Kingdom and hopes to continue their co-branded credit card partnership in the United States. Analysts James Faucette of Morgan Stanley is optimistic about new pricing agreements on the horizon between Visa and Amazon, maintaining an Overweight rating and a $280 price target on Visa shares. UBS analyst Rayna Kumar gave Visa a Buy rating and a $275 price target, noting Visa’s attractive valuation and encouraging global market share gains.


Optimism Beyond 2021

Visa continues to have strong brand recognition and play an important role in global commerce.

Despite weathering challenges of the pandemic and transaction fee negotiations, Visa is likely to continue to rebound into a stronger position over the next few years. With hedge funds buying and encouraging views shared by analysts, Visa presents as an opportunity for investors.

This entry was posted on Monday, December 6th, 2021 at 8:20 am and is filed under Stock. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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