5. Visa Inc. (NYSE:V)
Warren Buffett’s Q2 2024 Stake: $2.18 Billion
Analyst Upside Potential, as of September 26: 17.50%
Number of Hedge Fund Holders: 163
Visa Inc. (NYSE:V) is a payment technology company in the US and internationally. Widely regarded as one of the best stocks for exposure to the global digital payments sector, Visa facilitates transactions across more than 200 markets, connecting 4 billion account holders with over 130 million merchants and 14,500 financial institutions.
Visa Inc. (NYSE:V)’s dominance in the payments industry is evident, with an estimated 61% share of the US payments volume. As more customers use Visa Inc. (NYSE:V), it becomes increasingly attractive to merchants, driving further growth. Strategic partnerships and a focus on technology, such as AI, are expected to support Visa’s growth. For instance, Visa’s acquisition of AI-focused Featurespace will help manage real-time fraud and protect its payment ecosystem.
Visa Inc. (NYSE:V) aims to capitalize on the $20 trillion global consumer payments opportunity, focusing on acceptance expansion, e-commerce, and product innovation. The company remains optimistic about sustaining growth in new flows, primarily in Visa Direct and the commercial business.
In Q3 2024, the company reported adjusted EPS of $2.42, up from $2.16 the previous year, with a 7% increase in payment volumes. Net revenue reached $8.9 billion, a 10% year-over-year increase. Service revenue rose 8% to $4 billion, data processing revenue increased 9% to $4.5 billion, and international transaction revenue grew 9% to $3.2 billion. Visa reaffirmed its full-year 2024 outlook, expecting low double-digit revenue growth and a low-teens EPS increase.
Visa Inc. (NYSE:V) is currently trading at a price-to-earnings multiple of 24.21, with a dividend yield of 0.73%. Analyst ratings for Visa Inc. (NYSE:V) are overwhelmingly positive, with 21 analysts offering ratings in the past three months. The average 12-month price target is $315.42, with a high forecast of $345 and a low forecast of $275, representing a 17.50% increase from the last price of $268.45. This strong buy consensus reflects the confidence analysts have in Visa’s continued growth and market leadership.
By the end of Q2 2024, 163 hedge funds held stakes in Visa Inc. (NYSE:V), with Chris Hohn’s TCI Fund Management being the largest shareholder, holding stakes valued at $4.4 billion.
Here is what Wedgewood Partners said about Visa Inc. (NYSE:V) in its Q2 2024 investor letter:
“Visa Inc. (NYSE:V) detracted from performance despite healthy corporate results. The company grew earnings per share +12% as payment volume growth was up +8% and cross-border payment grew +16%, adjusted for currency. There are over 4.4 billion Visa debit and credit cards in circulation generating over $15 trillion in volume over the past 12 months. There is another estimated $10 trillion in cash and check volume, globally, which we think Visa can continue to move over to its electronic payment rails. In addition, the company has spent the past several years extending its payment capabilities into new flows of commerce, particularly for business-to-business transactions. This is another, extremely large (+$200 trillion) long-term growth opportunity for Visa that we believe investors are ignoring.”
