Bank of America Securities upgraded Visa (V) to Buy from Neutral following the stock’s recent underperformance, as analyst Mihir Bhatia sees the payment network company as a premier business.
Visa (V) stock rose 1.3% in Thursday premarket trading. The stock had fallen ~5.1% since Oct. 10, compared with the S&P 500’s 5.1% increase.
The stock’s current valuation is close to a 10-year trough due to overblown disruption concerns and rotation into AI/risk-on stocks. “We think this presents a compelling opportunity to own one of the best businesses in the world at a reasonable multiple,” Bhatia wrote in a note to clients.
The $38B merchant settlement and regulation risks, overall, shouldn’t hurt Visa’s (V) strong fundamentals, BofA said. Furthermore, stablecoins represent an opportunity for the company, not a threat, and will likely strengthen its position.
“Meanwhile, Visa (V) is one of six companies in the S&P 500 that produces 10%+ revenue growth, double-digit EPS growth, and operating margins >50%, over the past year and only one of two companies that has delivered these metrics annually since 2021,” Bhatia said.
BofA’s Buy rating on Visa (V) contrasts with the SA Quant rating and the average SA Analyst rating of Hold and aligns with the average Wall Street rating of Buy.