QuickStockAnalysis.com

Last week, Visa (stock ticker: V) has stopped its incredible bullish trend in almost $90, more than doubling money for the Visa IPO buyers. After retracing more than 12% to $78.80, Visa actually has a stock price of $83.60, as we can see in the following chart:

Is Visa still bullish? What is Visa´s outlook? Lets see some facts…

US economy as a whole doesn´t look too good; Bernanke yesterday warned investors that the crisis isnt over, and economic indicators, although they have had some improvement, still are on recession territory.

Headquartered in San Francisco, Visa, Inc. operates the largest electronic payments network globally by providing services and payment products to financial institutions and merchants. Therfore, Visa has no direct consumer credit risk.

Nevertheless, the credit card (CC) sector is, according to some experts, about to suffer a new regulations that could eventually drag Visa´s stock down. Merrill Lynch has a neutral opinion in Visa, and they believe that investors will continue to compare Visa with Mastercard before making decisions. Eventually, this should turn around, looking at Visa as the benchmark of the industry.

Visa´s management is very experienced; its CEO, Joe Saunders, is well known in the industry and highlt respected. Good management is essential and Visa has it.

Investors think of Visa as a stock to keep in the long term, motivated by Mastercard´s performance. Therfore, the correction was quite small. We believe that this correction was necessary in order for Visa to keep climbing. We recommend investors to buy Visa at a price below $84 having a target price for one year of $140.

Outlook? We estimate that Visa will generate net sales of $6.12 billion, an 18% growth in a year to year basis in FY08, and net sales of $6.84 billion in FY09 (12% y/y basis). This growth slowdown incorporates relatively eaker US consumer spending in the following years. Using a 40% tax rate, the company will have approximately $2.04 and $2.50 EPS in the FY08 and FY09 respectively.