Visa's (V) implied fiscal Q4 exit rate bodes well for initial fiscal 2027 forecast, despite lapping an exceptional fiscal 2026, UBS said in a note Wednesday.
The company raised its fiscal 2026 guidance for the second consecutive quarter, while fiscal Q4 guidance calls for net revenue growth at the high-end of the low-double-digit range despite foreign exchange volatility headwinds, according to the note.
UBS sees strength in Visa's underlying business, driven by value added services, which now account for over 30% of net revenue, strong pricing, cross-border strength driven by eCommerce trends, improving commercial and US inbound activity, and incremental FIFA-related demand, and Visa Direct, which contributes about 8% to 9% to Visa's payment volume, the note added.
Visa sees Pismo as a key driver of better client relationships, revenue growth, product innovation, and its long-term modernization strategy across payments, banking, stablecoins and money movement, the brokerage added.
UBS kept a buy rating on Visa and raised its price target to $420 from $410.
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