Visa Inc (V) Remains Vulnerable To Missteps Heading Into Earnings

Visa Inc (NYSE:V) reports earnings after closing bell today. This will be the first report since the company was added to the Dow Jones Industrial Average on Sept. 20. Since being added to that index, shares have increased over 10% and are heading toward a 52-week high of $205.25.

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Expectations for Visa’s report

Analysts believe Visa Inc (NYSE:V) will report an average earnings per share of $1.85 for its fourth fiscal quarter. Consensus estimates range from $1.76 to $1.95 per share. Revenues are expected to come in at $3.02 billion, although some estimates go as high as $3.11 billion.

The company guided for about 13% net revenue growth back in July and growth in adjusted annual diluted earnings per share somewhere “in the low 20s.” According to Seeking Alpha contributor Selerity Research, that would equate to revenue of around $11.776 billion with adjusted full-year earnings per share of between $7.44 and $7.56 per share.

Recent announcements and news about Visa

Earlier this week, Baird analysts increased their price target for Visa Inc (NYSE:V) from $200 to $220 per share, saying they expected strong fourth fiscal quarter numbers and see better trends. The company increased its annual dividend 21% earlier this month to $1.60 per share. Yield is now .65% now that shares have increased 50% over the last year.

Shares of Visa are approaching a new all-time high. Selerity Research analysts believe that the stock has been overbought recently, pointing to just how much the shares have risen. They also note that the Relative Strength Index is approaching 70. If earnings do not meet the expectations of Wall Street, then they see downside risk to $200 per share, and then down to $195 and even $190 per share. They emphasize that because of how quickly Visa shares have risen, the company is vulnerable to “even the slightest misstep” and that its earnings will set the tone for Mastercard Inc (NYSE:MA) when it reports tomorrow.

As of this writing, shares of Visa Inc (NYSE:V) had fallen less than 1 percent in early afternoon trading.