Visa Tops Estimates, Mastercard Hovers In Buy Zone Ahead Of Earnings
Dow Jones payments giant Visa (V) reported Q3 earnings late Tuesday followed by rival Mastercard (MA) early Thursday. Visa stock inched lower late Tuesday following its report. Both and Visa stock and MA shares are trading in buy zones.
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American consumers have proven surprisingly resilient in 2023 despite recession concerns early in the year. The Consumer Confidence Index is at its highest level since July 2021, according to the latest release from the Conference Board. Strong consumer spending propelled growth in travel, retail and auto stocks, often benefiting credit card companies.
Cross-border fees are especially important for Visa and Mastercard.
Meanwhile, Visa and Mastercard face an antitrust lawsuit from Block (SQ). The parent company of Square sued the credit card giants on July 14, alleging the payment networks and their member banks charged inflated fees and used their market power to employ anticompetitive practices.
Visa Earnings
Visa reported adjusted earnings rose 9% to $2.16 per share on 12% revenue growth to $8.1 billion.
Analysts expected adjusted Visa earnings will increase 6.5% to $2.11 per share in the fiscal third quarter. Revenue was seen climbing 10.8% to $8.06 billion.
Payments volume increased 9% for the quarter while cross-border volume popped 17%.
Service fee revenues rose 15% to $3.66 billion, topping expectations of $3.63 billion. Data processing fees also rose 15% to $4.1 billion, beating FactSet estimates of a 10.8% gain. International transaction revenue swung 14% higher to $2.92 billion, but fell short of forecasts of $3.01 billion.
Visa Stock
V stock ticked lower after market close Tuesday following results. Shares dipped 0.9% to 238.69 Tuesday prior to earnings.
Visa stock is trading in the buy zone for a flat base after surpassing the 235.57 buy point on June 30. Shares are trading just above their 21-day moving average. The current buy zone extends to 247.34.
Mastercard
Analysts expect Mastercard earnings to increase 11% to $2.85 per share for its Q2 results early Thursday. Revenue is seen climbing 12.4% to $6.18 billion.
FactSet guides an 8% rise in domestic assessment revenue to $2.47 billion. Cross border volume fees are anticipated spiking 24.9% to $2.01 billion while transaction processing fees slide 3.7% to $2.95 billion.
MA Stock
Mastercard stock fell 0.6% to 402.49 Tuesday after hitting a record 404.86 on Monday.
MA stock is trading in the buy zone for a flat base and holding above its technical lines. Shares initially surpassed the 392.20 buy point on June 30. The current buy zone stretches to 411.81.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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Source: Investor's Business Daily
