Visa (NYSE: V) is scheduled to report its fiscal Q2 2023 results on Tuesday, April 25, 2023 (after market close). We expect Visa
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Our forecast indicates that Visa’s valuation is $260 per share, which is 11% above the current market price of $234. Our interactive dashboard analysis on Visa’s Earnings Preview has more details.
(1) Revenues expected to edge past the consensus estimates
Visa’s revenues (net revenues) increased 22% y-o-y to $29.3 billion in FY2022 and 12% y-o-y to $7.9 billion in Q1 2023.
- The Data processing revenues grew 6% y-o-y in Q1 driven by a 10% rise in the number of processed transactions. We expect the Q2 results to follow the same trend.
- The Services revenue increased 10% y-o-y due to a 5% improvement in the nominal payments volume. We expect the same trend to continue in the second-quarter results.
- The International transactions revenues rose by 29% y-o-y because of a 22% jump in cross-border volumes. We expect the Q2 results to be on similar lines.
- Overall, we forecast Visa’s net revenues to remain around $32.3 billion in FY2023.
Trefis estimates Visa’s fiscal Q2 2023 revenues to be around $7.91 billion, just above the $7.79 billion consensus estimate.
(2) EPS likely to beat the consensus estimates
Visa Q2 2023 adjusted earnings per share is expected to be $2.01 per Trefis analysis, 2% above the consensus estimate of $1.98. The net income increased 21% y-o-y in FY 2022 driven by higher revenues. Further, the figure improved by 6% y-o-y in the first quarter. It was due to positive growth in the top line, partially offset by a 25% rise in operating expenses. We expect the same trend to continue in Q2. Overall, Visa is likely to report a net income of $17.65 billion and an annual GAAP EPS of $8.42 in FY 2023.
(3) Stock price estimate is 11% above the current market price
We arrive at Visa’s valuation, using an EPS estimate of around $8.42 and a P/E multiple of just above 30x in fiscal 2023. This translates into a price of $260, which is 11% above the current market price.
Note: P/E Multiples are based on Share Price at the end of the year and reported (or expected) Adjusted Earnings for the full year
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