Visa upgraded to Outperform at Mizuho on more optimistic card spend outlook

Mizuho Americas upgraded Visa (NYSE:V) to Outperform from Neutral on the premise that the U.S. consumers will increase their spending in categories where they’re more likely to pay with a card than cash.

Mizuho’s category analysis found that Visa’s (NYSE:V) subdued excess growth, compared with U.S. personal consumption expenditures (“PCE”) after COVID was largely the result of less card-based categories expanding more than card-based ones.

While that trend has started to unwind, Mizuho is optimistic about the remaining cash-to-card runway in the U.S. being longer than previously expected. The firm estimates that U.S. card penetration is at ~75%, compared with the consensus of 80%-90%.

“This leaves room for another decade of solid top-line growth domestically,” Mizuho analyst Dan Dolev wrote in a note to clients. “Plus, V’s performance in Canada & Nordics offers evidence of above-PCE growth, even when card penetration is >90%.”

Dolev lifted Visa’s (V) price target to $425 from $359, a result of increasing its price/2026 EPS multiple to 31x from 28x. In addition, he increased estimates for FY2026 and 2027 on better U.S. volume growth expectations. He now expects 2026 EPS of $13.00 from $12.62 and 2027 EPS of $14.76 from $14.11.

Visa (V) stock rose 0.7% in premarket trading.

Mizuho’s Outperform rating on the stock contrasts with the SA Quant rating Hold and aligns with the average SA Analyst rating and the average Wall Street rating, both at Buy.