Opinions Gordon Reid
Visa Inc.VCOMMENTJan 30, 2018
Gordon ReidStock price when the opinion was issued
As of Aug 14, 2026. Market Open.
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Premium contentFollowing recently reported earnings, we reiterate V as a TOP PICK. Consumers are spending and at higher rates than analysts expect -- including growth in travel spending despite geopolitical uncertainty. Cash reserves are growing as shares are aggressively bought back albeit with a slight increase in debt (not an issue as free cash flow is at five year highs). It trades at 29x earnings and supports an amazing 66% ROE and annual dividend growth has exceeded 15% over the past five years. We continue to recommend a stop at $325, looking to achieve $430 -- upside potential of 18%. Yield 0.7%
(Analysts’ price target is $404.18)
Visa and Mastercard have been treading water the past year because the market has been fixated on AI, but that money has been rotating out of AI into places like credit cards. The two companies have some of the best business models, big moats and trading at attractive PEs, though neither are at decades-long low PEs. Visa's layoff of 7% of workforce is good for the stock. Probably AI is making Visa more productive.
One of the highest-quality names he owns. Share price has done nothing over 12 months, but business continues to enjoy 10% growth. Its network isn't going away anytime soon.
Martin Cobb, ASIPMastercard and Visa have been weak because cash-to-card conversion has historically been the easiest thing for them to do but is now over. Value-added services are instead driving more growth. Agentic AI traffic is about to go parabolic, so can the cards play the role of authentication layer? He thinks so, and they should. Stablecoins and peer-to-peer transactions are not big deals, not major threats.
Fund flows have gone to energy and AI. Whenever this name goes on sale, it's proven to be a buying opportunity. No reason for it not to go higher. A screaming buy.
Darren SissonsPremium contentBoth are phenomenal businesses. Comparable on valuation and share price performance. If you own one, don't switch.
His clients own Visa, and have for a very long time. Makes the most sense for him as more payments become digitized and V captures more market share. It's the largest payment network, so its profitability is a bit higher on margins. Bit north of 20x PE, FCF yield north of 4%. Attractive valuation for an essential business.
Chris BlumasPremium contentWe reiterate V as a TOP PICK. With a commanding ROE of 65%, it holds a dominant position in the personal credit realm. We like that cash reserves continue to grow, while shares are aggressively bought back (albeit with a little more debt). Revenues are growing by 15% annually over the past five years as the dividend has doubled over that same time. We recommend maintaining a stop at $295, looking to achieve $383 -- upside potential of 18%. Yield 0.8%
(Analysts’ price target is $400.46)Digital payments are not going away. When it goes on sale, usually a mistake not to buy and then just sit back and wait. He's owned it personally for 17-18 years, probably his best investment.
Darren SissonsAn unassailable fortress for a long time. Fintech and card companies have been weak, with concerns about disruptive digital payment systems. Near-term uncertainty about long-term profitability.
Pretty dominant position. Still trading above long-term moving average. Lagging in this market. Not well inflation-protected. Put your focus elsewhere.
He owns Mastercard but not Visa. However they are both crown jewels in the market and good to buy. The rise in Agentic commerce and digital currency could be a concern but they have strategies o deal with it. The valuation has come down with multiple compressions.
Jamie Murray Continually increases number of transactions. Beneficiary of modest inflation (hyper-inflation causes less spending), as it gets paid on the dollars spent. Very attractive multiple ~24x PE (historically it's ~30x). Yield is 0.81%.
(Analysts’ price target is $402.83)Gordon ReidHe's out. Momentum has broken. Price is now below 200-day MA, and that's rolling over. Secular growth drivers are still there, for about 14% earnings growth at 23x PE. But it's more about valuation right now. If you think of it as technology, investors are seeing a lot more exciting names out there.
When technicals improve, he'd look at it again.
Having taken most of my money out, how do I know when to sell my last bit, or do I keep hanging on forever as I’m just playing with the house money? This is really the core of investment management. It's a question every investor and investment manager has to understand, come to terms with, and create a disciplined approach to the answer. You have to have a rule-based investment philosophy to allow long-term success. It's not "house money", it's your money. You should think of your profits, not in terms of the relationship with a cost of your investment, but just in absolute terms. It's your money. It doesn't have any less value because you've earned it in the market. Also you shouldn't just be holding on because it is "winning". You have to always be looking at the company in terms of how is it trading today relative to its past, and what might happen in the future. You have to judge a company every day, asking yourself if it is something you would buy today.