Visa Share Price Forecast November 2021 – Time to Buy V?

Shares of American multinational financial services corporation Visa (NYSE: V) are in the green today after closing at $203.25 on November 24^th (19:59 EST). The company put investors on notice in late –October by declaring a 17.2% increase in its quarterly dividend from $0.32 to $0.375 per share. There are several reasons why its board of directors were comfortable enough to authorize a huge dividend increase.

Visa – Technical Analysis

Visa’s financial statement indicates a market cap of $428.312 billion with total assets worth $82.896 billion. Revenue for 2020 was at $24.11 billion with a profit margin of 49.82% compared to $21.85 billion in 2019.

Oscillators such as Stochastic RSI Fast (3, 3, 14, 14)(25.33),  Williams Percent Range (14)(−67.43),  Bull Bear Power(−11.19) and Ultimate Oscillator (7, 14, 28)(45.80) are neutral. Moving averages such as Exponential Moving Average (10)(204.77), Simple Moving Average (10)(205.66),  Exponential Moving Average (20)(209.56), Simple Moving Average (20)(209.14) and Exponential Moving Average (30)(212.96) are neutral.

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Recent Developments

Visa recorded double-digit net revenue and non-GAAP earnings per share (EPS) growth compared to FY ’20 in spite of the fact that COVID vaccines only widely became available in the third quarter of its FY ’21. During this period, its net revenue increased 10.3% year over year to $24.11 billion in FY ’21. This was helped by the dollar amount of transactions processed by the company which grew by 16% year over year, total cross-border volumes climbing by 9% and processed transactions increasing by 17% year over year.

Visa and other payment companies are also under pressure due to the surging coronavirus cases in Europe. While its latest earnings report showed that overseas spending on Visa cards increased by 38%, the company has highlighted widespread border closures as a threat to recovery in the business. Another drag on Visa’s growth outlook is the ongoing squabble with Amazon, where the latter said that it would no longer accept purchases made with Visa credit cards in the UK starting next year. Amazon has already imposed a surcharge for those using Visa credit cards in Singapore and Australia and is pressuring Visa to cut its fees.

Furthermore, reports earlier in the year indicated that indicated the US Department of Justice (DoJ) was investigating Visa for possible monopolistic practices. They allege that Visa has imited the ability of merchants to route debit card transactions in order to limit network fees.

Should You Buy V Shares?

Various analysts have suggested that Visa shares will grow at an even higher clip in its current fiscal year.  As evidenced by the company’s operating results, it showed considerable momentum at the end of last fiscal year and payments volumes, total cross-border volumes, and processed transactions were all higher. These are signs that consumers are starting to travel and spend more which will help accelerate Visa’s growth potential.

Visa has faced similar threats to its business before, such as settling a case over fees with both Walmart (NYSE:WMT) stores and Kroger (NYSE:KR). The company has raised its annual payout for 12 straight years and has a lot of cash to comfortably continue making hikes despite the fact that its dividend has a lower-than-average yield. Its dividend has grown 80% in the past three years and the shares returned 146% over the past 5 years. Thus, despite facing headwinds, there are enough reasons to suggest that these are temporary. Considering this, Visa shares offer investors a buying opportunity in a stock that has an impressive track record for both growth and income.

 

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