Visa Inc (NYSE:V) should continue to benefit from the large global cash conversion opportunity and ongoing cross-border travel strength, say analysts at UBS in note published on Tuesday.
After the close, Visa reported volume and transaction data from April and May (through May 28), which showed that quarter-to-date (QTD) US consumer spending remained stable while cross-border volume growth decelerated slightly, but remained strong.
They wrote that Visa's QTD US payments volume increased 5% year-over-year, slightly below their forecast of 6% for the estimated 3Q of fiscal year 2023 (FY23) as a whole, and down from 10% in the March quarter.
QTD US credit volume, meanwhile, increased 5% while debit volume rose 6%.
“April's and May's slower growth partially reflects headwinds from lower fuel prices year-over-year and a decline in average ticket sizes as inflation moderates, in our view,” the analysts said.
They added that the headwinds are likely to persist through the remainder of Visa's FY23.
As well, the UBS analysts mentioned that Visa's US card not present volume showed some acceleration in May compared with April, representing what they called a positive read through for e-commerce focused PayPal.
Shares of Visa eased 0.3% to $220.98 in late afternoon trading on Wednesday but have gained about 7% year to date.
Contact Sean at sean@proactiveinvestors.com