Visa Inc. (NYSE: V) is set to report its fiscal first-quarter financial results after the markets close on Thursday. The consensus estimates call for $1.46 in earnings per share (EPS) and $6.08 billion in revenue. The same period of last year reportedly had $1.30 in EPS and $5.51 billion in revenue.
Earlier this month, Visa said it acquired fintech firm Plaid for about $5 billion. Management was quick to note that the transaction will not affect the company’s dividend policy or its scheduled stock buyback program. The transaction is expected to close in three to six months.
While Visa is a little late to the game, this is seen as a big move for the credit card giant. Rival Mastercard has spent about $3.3 billion on fintech acquisitions. The largest, announced last August, was a $3.2 billion acquisition of Denmark-based Nets, an account-to-account clearing, payment and electronic billing business.
Plaid provides the plumbing for Venmo, the fintech app from PayPal, which ties such fintech apps to the banks where people keep their money. This saves a fintech firm from having to develop the connection on its own and from spending a small fortune on software engineers and developers. Plaid’s application programming interface provides the platform on which a consumer can link an app to a bank.
One in four people with a U.S. bank account have used Plaid to connect to more than 2,600 fintech developers across more than 11,000 financial institutions, according to Visa’s announcement, and about three-quarters of the world’s population used a fintech app last year to transfer funds. In 2015, only 18% of people had used a fintech app.
Visa stock has outperformed the broad markets with a gain of about 52% in the past 52 weeks. In just the past quarter alone, the stock is up closer to 14%.
Prior to the release, a few analysts have weighed in on Visa:
- Raymond James has an Outperform rating and a $221 price target.
- Morgan Stanley’s Overweight rating comes with a $240 target.
- Robert Baird has an Outperform rating with a $220 target price.
- Citigroup has a Buy rating with a $236 price target.
- Macquarie rates it as Outperform with a $250 target price.
- Nomura has a Buy rating with a $233 price target.
Visa stock traded below $206 on Thursday, in a 52-week range of $133.30 to $210.13. The consensus price target is $219.00
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