Visa Incorporated (NYSE:V) rose 11.6% on Friday, the largest daily gain since 2020, after posting impressive quarterly results that beat Wall Street estimates. The financial services provider registered a 24% year-over-year increase in net income to $4 billion in the fiscal first quarter of 2022.
The firm attributed the gains to increasing international travel and e-commerce growth. The news came as a relief to the company whose stock had been subdued by a slowdown in cross-border travel, with shares underperforming S&P 500 by 28% last year.
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Visa continues to soar with transactions up 21% in the quarter to $47.6 billion compared to the same period in the preceding year. The firm’s Chairman and CEO Alfred Kelly noted that transactions are set to expand further as travel recovery and consumer spending move towards the pre-pandemic levels.
Visa flips $220 Resistance
The technical outlook of Visa complements the positive fundamentals around the stock. The stock has turned the $220 resistance level into support and seems to be on track to hit its $252 high.
The 50- day moving average (blue line) and the 100- day moving average (red line) have joined in the upward momentum. However, we expect some consolidation at the $235 minor resistance before further upward movement.
Meanwhile, analysts maintain a bullish view on Visa, at least in the near term. RBC Capital Markets’ Daniel Perlin allocates an outperform rating with a $278 price target lowering it slightly from $284.
Perlin supports his stand with cross-border travel and economic recovery. MoffetNathanson’s, Lisa Ellis, has assigned it a buy rating and $300 price target. The analyst expects Visa to outperform in the next two to three years.
Summary
The technical and fundamental analysis supports a bullish momentum in Visa both in the short term and long term, largely due to post-pandemic recovery. The current price level or retracement presents an ideal buy opportunity so long as the price remains above the support level and the moving averages.
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