Mizuho: Mobile Payments Titan Visa’s Momentum Isn’t Slowing

October 31, 2018         By: Steven Anderson

Visa is easily one of—and quite possibly the—biggest names in mobile payments. It’s been around a long time and it’s used that time to build a user base to dwarf just about any other user base out there. A new report sent our way from Mizuho, meanwhile, spells out its expectation that Visa’s dominance will carry right on unabated.

Quite possibly the biggest part of the news is that Mizuho doesn’t expect any changes in the price target for Visa shares. It’s still projecting $162 per share, and given that the current price is $139.85 as of this writing—it’s been wobbling around $140 for most of the day—such a target looks just a bit ambitious, but only just a bit.

Follow this up with recent fiscal year 2019 guidance from the company that suggests revenue growth in the low double digits, and the stock price taking a roughly 20 percent jump over current levels makes something like sense. Mizuho notes that it believed that the buy side was expecting Visa to only generate single-digit growth rates, which would make it a much more attractive target.

Mizuho also points to a set of current trends, including growth in the US debit card market, the rise of cross-border transactions, increasing use of contactless payment systems and even some surprising gains from Visa Europe to contribute.

All of this is, admittedly, a little whistling in the dark. All it will take is one good recession—and more than a few figure we’re in line for one of those to show up at some point here—to derail consumer spending and clock Visa one right below the waterline. While Visa’s massive user base will give it some insulation, especially as measured against its competition, it’s still more likely to be the least dirty shirt rather than the actual leader in a robust market. However, it’s also important to point out the destabilizing factor of a Trump presidency; we’ve already seen that this is anything but business as usual, so its impact may be broader-ranging than most.

So while Mizuho’s price target might be a bit high, it’s a statement of optimism both for Visa and for the wider economy. Hard to fault optimism, especially when it means people keep their jobs and the economy carries on.