Visa's stock has been a safe haven. But is it a risky play ahead of earnings?

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Consensus expectations for Visa’s revenue growth in the new fiscal year may be too high

Shares of Visa Inc. have easily outpaced the S&P 500 over the past decade, but one analyst is questioning whether the stock is still a good place to hide — especially heading into next week’s earnings report.

Dolev noted that consensus expectations call for 10.5% net revenue growth in fiscal 2024, and he wonders whether that’s too upbeat a projection.“Our analysis of the historical relationship between Visa’s total revenue and U.S. personal consumption expenditures suggests that consensus revenue growth expectations of +10.5% likely contemplate an overly optimistic macroeconomic backdrop, continued high inflation, and/or an improvement in Visa’s capture of incremental consumer spending,” he wrote.

Jefferies analyst Trevor Williams took a look earlier this week at both Visa and Mastercard Inc. MA, -2.13%, writing that “neither set-up strikes us as particularly compelling” ahead of earnings.

 

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