Visa stock resists market sell-off by delivering on earnings

Visa Inc. (NYSE: V) stock popped in after-hours trading by over 4% as the company reported better than expected earnings. Earnings beat could partly be attributed to cross-border transactions and increased international travel. 

Alfred Kelly Jr. Visa CEO concluded that the results were “very strong” despite the decision to suspend operations in Russia due to their unprovoked invasion of Ukraine. He also concluded that the company expects continued growth driven by robust travel recovery and expansion of ways to pay.   

Net revenue rose to $7.19 billion from $5.73 billion a year earlier, with net profits reported to be $3.65 billion or $1.70 per share. International transaction revenue, which is tied to cross-border payments rose by 48% to $2.2 billion. In the most recent business year, Russia accounted for 4% and Ukraine for 1% of total net revenue. 

V chart and predictions

Shares of the company have had a choppy period of trading, dating back from December 2021 onwards. A double-bottom was noted in this period as well, possibly predicting a reversal in trend. Even with the after-hours pop of over 4% the shares are still below all daily Simple Moving Averages, however, an increase in volume could see the shares buck the current trend. 

Analysts give the stock a strong buy rating and with the earnings, the company just reported it is more evident why they’re doing so. The predicted average price for the next 12 months they give to the stock is $275.88 31.77% higher than the current trading price of $209.36. 

Strong high-margin cross-border transactions helped Visa beat earnings expectations, and with Covid restrictions easing for the travel season in Europe, the company could potentially continue to benefit from these tailwinds. 

Investors currently in the stock potentially have reasons to be pleased with the solid quarter the dividend yield of 0.75% seems secure. Others looking to jump into the stock could have missed their chance to do so before earnings as the stock could jump higher as a result. 

Nevertheless, potential investors should evaluate the market sentiment before making a decision to invest.

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