Key Stats for Visa Stock
- Price Change for Visa stock: 6%
- $V Share Price as of Dec. 11: $346
- 52-Week High: $376
- $V Stock Price Target: $396
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What Happened?
Visa (V) stock jumped over 6% on Thursday after Bank of America upgraded shares to “buy” from “neutral”, calling the payments giant “a great business on sale.” Analyst Mihir Bhatia pointed out that Visa stock is trading at its lowest relative valuation multiple in a decade despite strong fundamentals.
The upgrade comes as Visa navigates multiple strategic developments. Most notably, the company recently reached a proposed settlement with U.S. merchants in the long-running MDL litigation, which has been ongoing for nearly 20 years.
Under the agreement, U.S. average credit interchange rates would be reduced by 10 basis points for five years, with rates capped during that period.
The settlement also gives merchants more flexibility on surcharging and “honor all cards” policies. Merchants can now choose to accept cards along distinct categories: commercial, premium consumer, and standard consumer.
While this represents a concession from Visa’s traditional position, CFO Chris Suh emphasized that merchants consider far more than costs when making payment choices, including safety, security, reliability, and customer experience.
The legal approval process is expected to continue through fiscal 2026, with implementation likely occurring in fiscal 2027.
Despite the financial impact from lower interchange, management remains confident in Visa’s competitive position.
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What the Market Is Telling Us About Visa Stock
The upgrade for Visa stock reflects growing confidence that the company’s long-term growth drivers remain intact. Bank of America’s Bhatia specifically highlighted that stablecoin integration will likely strengthen Visa’s position rather than undermine it, addressing a key investor concern.
During recent investor conferences, management provided extensive details on the company’s stablecoin strategy.
Visa now has over 130 card issuance programs for stablecoins across 40 countries. Stablecoin settlement operations have reached a $2.5 billion annualized run rate, up from $1 billion in August.
Management views stablecoins as opening white-space opportunities rather than as cannibalizing existing business.
The most compelling use cases exist in markets where access to U.S. dollars is difficult or where local currencies are volatile—areas where Visa doesn’t have strong penetration today.
Visa stock is also benefiting from continued resilience in core payment trends. Through fiscal Q1 (which ended November 30), U.S. payment volume growth remained stable at 7-8%, while cross-border volumes held steady at around 11%.
Management described consumer spending as “stable and strong” with broad-based health across discretionary and non-discretionary categories.
Value-added services (VAS) remain a standout growth driver for Visa stock. The segment grew 23% in fiscal 2025 to $10.8 billion, now representing 27% of total revenue. VAS includes four portfolios—issuing solutions, acceptance solutions, risk and security services, and advisory—all exceeding $1 billion each and growing at double-digit rates.
CFO Suh emphasized that VAS growth is “highly recurring” and “high margin,” evidenced by its reaching significant scale without dragging down overall company margins. The business benefits from being closely tied to core transaction volumes while offering substantial operating leverage.
Commercial and money movement solutions also accelerated, with commercial volume growth hitting 10% in fiscal Q4, the first double-digit quarter in some time.
Management attributed this to lapping prior losses, new wins ramping up, and structural tailwinds, such as increased cross-border commercial travel.
On the innovation front, Visa stock could benefit from early leadership in agentic commerce. The company introduced Visa Intelligent Commerce in April, featuring APIs that enable AI agents to make purchases on behalf of consumers. Management noted they were “one of the first to market” on agentic commerce before it became a mainstream topic.
For fiscal 2026, Visa guided to low double-digit constant-currency revenue growth, with operating expenses growing at a similar rate.
While this implies flattish operating margins in the near term, management emphasized the need to invest in high-return opportunities like stablecoins, agentic commerce, and expanding the VAS product portfolio.
The 2026 FIFA World Cup in North America represents another near-term catalyst for Visa stock. Management has 70 clients already engaged in marketing services related to the event and expects an influx of cross-border travelers to boost volumes, particularly in the high-yield inbound travel corridor to the U.S.
With Visa stock trading at a 10-year low on relative valuation while maintaining industry-leading margins and double-digit growth prospects, Bank of America’s upgrade appears well-timed as investors reassess the company’s long-term positioning.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
