Take your bank card out of your wallet, take a look at those three numbers on the backside and… don’t tell a soul! We’re serious. If you flip the card, you’ll most likely see the Visa logo. There’s a chance that it could be Mastercard or American Express. But in most cases, it’s likely to be Visa – as it’s the largest payment processor in the world. And many analysts believe that the company will continue growing, same as its stock – let’s try to understand what their belief is based on.
In the last five years, Visa stocks have increased by more than 90%, easily beating the stock market . You can see this glorious movement on the chart below.
If you are not sure whether it is too much or too little – we have the chart comparing Visa stock and the Dow Jones Index. The chart image speaks volumes – there’s almost no explanation needed. If you want to find the reason for price movements yourself, you can utilize different trading tools which warn you about all upcoming events and allow you to draw the right conclusions based on the data. For example, using economic calendar can help you keep track of all significant economic affairs.
Visa (and Mastercard as well) now symbolizes stability and reliability in this crazy and unpredictable thing which was once known as the world. The reason is that the company has large room for growth – and this growth looks quite natural.
Some of us have finally forgotten about cash because we use plastic all over the place, both online and offline. And the number of new online shops and online services is growing like an unstoppable beanstalk. However, there are still lots of people who still prefer cash and coins (it is unclear why, though) – even so, all of them are potential Visa clients.
Financial institutions such as banks are hit hard by crises, but Visa feels them to a lesser extent. If people stop spending lots of money – causing the company to generate less profit through transactions – it can be offset by an increase in cardholders.
Plus, there are some additional positive factors. Easing off of Covid restrictions in China is likely to increase volumes of transactions. And the recovery of tourism revenue is likely to help too.
At the same time, Visa revenue goes up permanently (except for the pandemic in 2020) and analysts consider that trend will be the same despite the world crisis. It is logical that they expect a very similar future for Visa stocks. The consensus forecast is +17% in the next 12 months simultaneously with the average rating “Strong Buy”.
But don’t let this “Strong Buy” cloud your judgment. The situation in the markets changes every week and every day. So, you should do your own research before every single trade.
