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visa (NYSE:V) posted better-than-expected results in the fiscal second quarter (ended March 31) on the back of increased global card usage and cross-border travel. After the release, the company’s shares gained about 2 percent in extended trading yesterday.
Adjusted earnings per share of $2.09 beat consensus estimates of $1.99 per share, up 17 percent from the year-ago period. Meanwhile, revenues rose 11 percent year over year to $8 billion and beat consensus estimates by $200 million. The top line benefited from strong 24% growth in total cross-border volumes, particularly in Asian markets.
In other key metrics, the volume of payments increased by 10% year over year, and the total number of transactions processed increased by 12% to 50.1 billion.
Commenting on Visa’s fiscal Q2 performance, CEO Ryan McInerney said, “Visa’s strong fiscal second quarter performance reflects our continued focus on growth – consumer payments, new flows and value-added services.
Going forward, the company expects consistent net income growth in the low-double digits for the fiscal third quarter. According to Visa, the recovery of travel costs will continue, which will probably support higher growth. A modest increase in adjusted operating expenses is also expected during the year.
What is the forecast for Visa stock?
Following the Q2 earnings results, Mizuho Securities analyst Dan Dolev reaffirmed a Hold rating on the stock with a $240 price target. Analysts believe the reported quarter benefited from the post-pandemic travel recovery and compared to last year.
The consensus among analysts is a strong buy based on 14 buys and one hold. An average price target of $267.29 indicates a potential upside of 16.4% from current levels. Shares have gained about 11 percent year-to-date.
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