Finance/Rental/Leasing · #57 in the Retail 100

Visa

Our rating: hold
12-month target: $473.56 +12.6%
Expected vs. S&P 500: -5.3 ptsSee the math
Next earnings: Jan 28In 84 daysEarnings calls page ↗

Visa's incentive payments to banks and merchants grew 21% last quarter against 13% revenue growth, so partners are keeping more of each swipe.

Summary

Visa runs the largest card network and earns a small fee every time a Visa card is used, while banks, not Visa, lend the money. Card spending keeps growing steadily, and services such as fraud tools are growing much faster. But Visa is paying banks and merchants more to keep their business, while lawmakers and courts press on its fees. The stock depends on revenue growth staying near 10% as those payments rise, a merchant settlement takes effect and a swipe-fee bill stays stalled.

$420.42

+$76.01 (+22.07%)Past year

What Visa does

Visa runs the largest card network, connecting the banks that issue cards with the stores that accept them. It takes small fees on each purchase but lends nothing, so it bears no credit risk.²⁵

What it sells

Processing fees36% of revenue before incentives, FY2025
Charged for authorizing, clearing and settling each card transaction, plus fraud and security tools. Grows with the number of transactions.
Volume fees31% of revenue before incentives, FY2025
Charged to banks based on how much their customers spend on Visa cards.
Cross-border fees25% of revenue before incentives, FY2025
Charged when a card is used in another country or a purchase needs currency conversion, so they rise and fall with travel.
Other services7% of revenue before incentives, FY2025
Consulting, data and some card services, plus fees for licensing the Visa brand and technology.

Who buys it

Banks are the customers: they issue Visa cards and sign up merchants, then pay Visa's fees. Visa returned 28% of gross revenue to banks and merchants as incentives in FY2025. One client was 11% of net revenue, and 61% came from outside the U.S.

Where you've seen it

The Visa logo on debit and credit cards that banks issue. The bank, not Visa, sets the interest rate.

The backstory

Lawmakers, courts and big clients are all pressing on Visa's fees. The Justice Department sued over debit in 2024, President Trump endorsed a credit-routing bill in January 2026, and a merchant settlement that trims credit rates faces final approval in November. Banks and merchants are also bargaining harder, so Visa pays more in incentives to keep them. CEO Ryan McInerney is responding with services, job cuts and stablecoin settlement.

How the business makes money

Why Visa earns on every swipe without lending a cent^6,9,26,27,34

Step 1
Shoppers keep spending on Visa cards. Visa processed 74 billion transactions last quarter, 10% more than a year earlier.
Step 2
Visa charges small fees on the value and number of payments, more when a card is used abroad. Banks, not Visa, lend the money.
Step 3
Visa pays banks and merchants to use its network, about 30% of gross revenue last quarter.
Step 4
Services like fraud scoring, about a third of net revenue, add fees that swipe-fee rules don't reach.
What shareholders get
Visa keeps much of each fee as profit, and returned $5.2B to shareholders through buybacks and dividends last quarter.

Advantages

The size of its network

Major advantage

Visa's biggest advantage. Even newer payment forms reach shoppers through its network, with over 225 stablecoin-linked card programs running on Visa.²⁷

Dominance in U.S. debit

Strong advantage

Strong, but under legal attack. By the Justice Department's count, Visa handles over 60% of U.S. debit transactions. That brings in more than $7B a year in processing fees.⁹

Services sold on top

Strong advantage

A strong and growing hedge against fee rules. Services such as fraud scoring now make up about a third of net revenue.^2,27

What's changing

Paying more to keep big clients

Visa grew revenue 15% in fiscal 2026, its fastest in over 15 years excluding the pandemic rebound and acquisitions, but guided to low double-digit growth for 2027 as big clients renew on richer terms. In August it agreed to buy fraud-detection firm BioCatch for $2.4B. A judge weighs final approval of the merchant settlement on November 16.^26,27,28,34

Competitors

Who else an investor would consider, and how they compare.

Company	Market value	What it does	Compared with Visa
Visathis stock	$805.27B	Visa runs the largest card network, connecting the banks that issue cards with the stores that accept them. It takes small fees on each purchase but lends nothing, so it bears no credit risk.
MastercardMA	$537.51B	The second global card network, earning a small fee on each payment, plus services.	Nearly the same business; Mastercard leans more on services, 41% of its revenue.^15,23
American ExpressAXP	$212.72B	Issues its own premium cards and lends to cardholders, earning fees and interest.	Amex carries loans and credit losses; Visa only runs the network and lends nothing.¹⁰
PayPalPYPL	$47.02B	Digital wallet and online checkout button, often funded by a linked card.	PayPal uses Visa's network but competes to own the checkout button.
CircleCRCL	$20.36B	Issues USDC, a dollar stablecoin that can move money without card networks.	Circle could bypass card fees, but Visa already settles some payments in USDC.^11,21

Leadership

Who runs the company, and how the stock has done under the CEO.

V +87.4%S&P 500 +92.5%Total return with dividends since Feb 2023

202420252026

Ryan McInerneyCEO3.7 yrs

Chris SuhCFO3.2 yrs

Jack ForestellChief Product and Strategy Officer3.8 yrs, since 2023

When McInerney was named (Nov 2022), the stock moved -0.1% that day; the S&P 500 moved +0.5%.

Wall Street on McInerney: PositiveJPMorgan raised its price target to $450 from $400 and rates it a Buy. UBS said the growth pace Visa expects at the end of the fourth quarter bodes well for its 2027 forecast.^L5

Leadership sources (5) · researched Oct 2026

L1Visa Announces Leadership Transition · Visa, 2022-11-17
L2Visa hires CFO replacement · Payments Dive, 2023-06-20
L3Visa's incoming CEO taps new team · TSG, 2023-01-30
L4Visa to Participate in Upcoming Investor Conferences · Visa, 2026-02-11
L5Visa, Inc.: Target Price Consensus and Analysts Recommendations · MarketScreener, 2026-10-08

Bull vs. bear: two bets on the same stock

1
A share is a small slice of the company. Its value comes from the profits the company will make in the future.
2
Nobody knows those profits yet. Buyers (bulls) pay today's price betting they'll beat what most people expect. Sellers (bears) bet they'll fall short.
3
When results come in, the price moves toward whichever side was right, and that side makes money.

The question they disagree on

Can Visa keep net revenue growing at least 10% a year as bank incentives, a swipe-fee bill and a merchant settlement press on its fees?^{6,7,26,27,28,34,35}

Bull case: why buyers buy

If card spending keeps growing near 10% and services grow faster, Visa's earnings keep rising by double digits even as it pays partners more.

Shoppers are still spending steadily. U.S. payments volume grew 10% last quarter and was still growing 10% through October 21, management says.
Services keep growing faster than fees. Value-added services such as fraud and data tools grew 31% to $4B last quarter, helped by World Cup marketing work.
Visa keeps beating forecasts. It topped earnings and revenue estimates in each of the last four quarters, Zacks says.
Visa carries stablecoins as well as competing with them. Stablecoin settlement on its network passed a $25B yearly pace, up tenfold in a year, Visa says.

Bear case: why sellers sell

If incentives keep outpacing revenue and the settlement or swipe-fee bill cuts rates, fee growth slows toward volume growth and a stock priced for steady gains falls.

Keeping big clients will cost more. About a quarter of Visa's payments volume comes up for renewal in fiscal 2027, up from a fifth, and incentive growth will step up.
Earnings growth is slowing. Visa guides to adjusted EPS (earnings per share) growth in the low double digits to low teens for fiscal 2027, down from 16%.
A swipe-fee bill has the President's backing. The Credit Card Competition Act would make big banks offer a rival network on credit cards, and more senators joined in August.
A settlement would trim what Visa can charge. It cuts credit swipe rates by 0.10 percentage point for five years, and a judge weighs final approval on November 16.

Where Delphi landsholdWe think today's price already weighs both sides fairly.See why

What to watch

The numbers that will settle the debate.

Payments volume and transactions■ flat

Volume up 9% excluding currency swings and transactions up 10%, to 74.2 billion, last quarter, after 10% for both the quarter before^1,26

These drive service and data processing fees, about two-thirds of gross revenue.

Cross-border volume and fees■ unclear

Volume outside Europe up 14% excluding currency swings last quarter, but international transaction revenue up only 8%²⁶

Cross-border fees are about a quarter of gross revenue and Visa's highest-priced payments.

Client incentives vs. net revenue▼ worsening

Incentives $5.1B, up 21%, against net revenue up 13% last quarter; Visa expects incentive growth to step up in fiscal 2027^26,28

Shows how much of each fee Visa hands back to banks and merchants to win their business.

Next earnings report

Jan 28

In 84 days

Earnings calls page ↗

Expected earnings per share: $3.63
Expected revenue: $12.19B

What to listen for: Whether incentives keep growing faster than revenue as big renewals start, and whether Visa holds net revenue growth in the low double digits.^30,32

What would prove this wrong

✕Congress passes the Credit Card Competition Act.
✕Payments to banks for issuing cards keep growing faster than net revenue for several quarters.
✕Payments volume growth slows well below 10% without a recession.
✕U.S. shoppers move meaningful online spending to stablecoins or bank-to-bank payments.

Our ratingHoldas of Nov 3 close, $420.42 · what ratings mean

Visa keeps beating forecasts, but it trades slightly above its five-year typical valuation while incentives rise and 2027 earnings growth slows, so expected gains trail the S&P 500.

12-month target: $473.56 (+12.6%)
Plus dividend: +0.6%
S&P 500, same method, with dividends: +18.5%
Expected vs the market: -5.3 points

The math behind the recommendation

Three 12-month price scenarios, weighted by probability, compared with the S&P 500 under the same method.

Now $420.42

Target $473.56

bull case25% likely

$562.51 +34%

Volume keeps growing about 10%, services grow over 20% and renewals cost less than feared, so earnings beat the top of guidance.

$17.51 earnings per share × 32.1 = $562.51

base case50% likely

$468.30 +11%

Net revenue grows low double digits as guided, incentives rise with renewals and the settlement trims credit fees, leaving earnings in line with estimates.

$17.05 earnings per share × 27.5 = $468.30

bear case25% likely

$395.11 -6%

Renewals cost more than planned and the settlement or swipe-fee bill bites, so fee growth slows, estimates fall and investors pay less for Visa.

$16.64 earnings per share × 23.7 = $395.11

Why these odds: Visa beat earnings and revenue estimates four quarters running. But fiscal 2027 consensus sits at the top of Visa's guidance, more analysts cut than raised estimates this week, and incentives will step up, so the risks look balanced.

How the prices are built: Wall Street expects earnings per share of $17.05 for the year starting a year from now (analysts range from $16.23 to $17.97). Today the stock trades at 27.9 times next year's earnings per share; its five-year middle is 26.06.^{26,27,32,33,35}

What tests the call: Fiscal Q1 2027 earnings (date expected, not yet confirmed) (Jan 28)

Buy means expected to beat the S&P 500 by 10+ points over 12 months; Sell means expected to trail it by 10+. Inputs gathered Oct 28; the recommendation updates with the price every day. Model-generated, not personalized investment advice. How ratings work · Track record

What the price assumes

At $420.42, investors pay 50% more than they pay for the average stock's earnings

Visa trades at 28 times the earnings analysts expect over the next 12 months. That ratio is the multiple: what investors pay today for each dollar of a year's earnings. That is above its five-year middle of 26.

Analysts expect earnings to grow about 13% the year after, against about 16% for the S&P 500. The S&P 500 trades at 19 times. Visa's earnings are expected to grow slower than the market's, so the premium has to rest on something other than growth, such as how dependable those earnings are.

Visa multiple: 28×
S&P 500 multiple: 19×
Base case: +11%
Bear case: −6%

The skewOur bear case loses about 53¢ for every $1 our base case makes. That ratio, how much you stand to lose against how much you stand to make, is the skew.

Last earnings

FQ4 2026 results, reported Oct 27

Visa capped its fastest revenue growth in over 15 years, excluding the pandemic rebound and acquisitions, but guided to slower growth as it pays more to renew big clients.^{26,27,28,29,30,31,36}

Reported Oct 27	Expected	Actual	Difference
Earnings per share	$3.44	$3.48	+1.2%
Revenue	$12.09B	$12.14B	+0.4%

Stock reaction: Down about 1% to 2% after hours, then about flat midday the next day (about $402 at 12:30 p.m. ET)

Why the stock moved

Down at first: fiscal 2027 guidance of low double-digit to low-teens EPS growth is below fiscal 2026's 16%.
Down at first: incentives rose 21%, above forecasts, and Visa expects them to step up as big clients renew.
Recovered: earnings and revenue beat forecasts, and the outlook matched Wall Street's expectations, Cantor Fitzgerald says.
Recovered: spending held up, with U.S. payments volume still growing 10% through October 21.

What it means for the stock: Weakened Visa's take, not demand. Volume and services held up, but incentives are outrunning revenue and will rise further in fiscal 2027, one reason earnings growth slows.