Visa's revenue miss prompts caution on Wall Street
Technology
Visa's revenue miss prompts caution on Wall Street
(Reuters) - Visa's underwhelming third-quarter revenue prompted several brokerages to cut their price targets on the company's stock, stoking concerns about slowing growth in customer spending and casting a shadow on the US payments industry.
The results underscore the challenges the industry is facing after several quarters of growth as inflation and high borrowing costs prompt a large section of customers to cut back on purchases, while wage growth loses steam.
Visa also reported a slowdown in US payments volumes through the first three weeks of July, which it said was due to several factors including the CrowdStrike-related outage last week.
Shares of Visa fell nearly 4% to $254.13 and wiped out the gain they have seen this year. At least nine prominent Wall Street brokerages lowered their price targets on the stock.
"We don't expect a positive change in narrative," Jefferies analysts wrote in a note. "The current (valuation) multiple will prove a good entry point, but (we) struggle to see a near-term catalyst."
"We would not be surprised to see shares more range-bound over the next few months until there is greater clarity on the FY25 guide," Raymond James wrote.
Visa also said payment volumes in Asia Pacific had slowed due to the economic environment, most notably in China. A prolonged property crisis and weak business sentiment have weakened the country's economy.
