Visa - Why Visa stock should outperform in 2025, Wolfe Research

Investing.com -- Visa Inc (NYSE:V ). is well-positioned for a strong 2025, according to a note by Wolfe Research. The brokerage highlighted Visa's robust growth potential, underpinned by macroeconomic tailwinds and structural drivers, making it a top pick in the payments sector.

Wolfe's optimism is fuelled by strong consumer trends, resilient U.S. volume performance, and cross-border transaction growth.

Analysts noted “Visa’s CFO Chris Suh and head of IR Jennifer Como conveyed confidence that FY25 retains elements of conservatism” with early indicators pointing to strong initial U.S. volume performance and favourable foreign exchange tailwinds materializing.

Key factors supporting Visa's potential include its diversified growth areas like value-added services and tokenization, which have shown strong momentum.

According to Wolfe, VAS and New Flows, which account for over 30% of Visa’s mix and are growing at approximately 20%, continue to be accretive to growth, implying the potential for double-digit growth in the medium term.

“V highlighted that VAS/New Flows will continue to be accretive to growth, which we believe continues to imply potential for LDD growth medium term,” analysts wrote.

Visa also expects to leverage pricing opportunities in 2025, such as a new charge for cyber protection services in Europe, while maintaining a focus on innovation with expansions like its Pismo platform and enhanced fraud capabilities through Featurespace.

“Featurespace, announced in September, is intended to expand V's fraud/risk capabilities with the opportunity to expand through FI's.”

The report maintains an “outperform” rating for Visa with a price target of $350, suggesting an upside of over 11% from current levels. Wolfe sees Visa continuing to outpace U.S. personal consumption expenditure growth, supported by a potential recovery in average transaction sizes and stable spreads across carded categories.

With these strategic advantages, Wolfe believes Visa is set to outperform in 2025, driven by its ability to capture more transaction economics and navigate evolving market dynamics.Visa (V)

Source: Investing.com