Today’s News
Visa’s disappointing third-quarter revenue has led several brokerages to lower their price targets on the stock, raising concerns about decelerating consumer spending and its implications for the U.S. payments sector.
![Visa's third-quarter revenue miss prompts brokerages to lower stock targets, highlighting concerns in the U.S. payments industry.
Image Source: The Hill](https://www.dooprimenews.com/wp-content/uploads/2024/07/credit-card-1.jpg)
Image Source: The Hill
The financial results highlight ongoing industry challenges after periods of growth, exacerbated by inflation and high borrowing costs which have compelled many consumers to reduce their spending.
During the first three weeks of July, Visa reported a decline in U.S. payments volumes, attributing it to several factors including last week’s CrowdStrike-related outage. The company’s shares dropped nearly 4% to USD 254.13, erasing gains made earlier this year, with at least nine major Wall Street brokerages revising their price targets downward.
“We don’t expect a positive change in narrative,” analysts at Jefferies commented. “The current (valuation) multiple will prove a good entry point, but (we) struggle to see a near-term catalyst.”
![Visa’s post pandemic volume growth suffers inflation hit.
Image Source: Reuters](https://www.dooprimenews.com/wp-content/uploads/2024/07/13-1.png)
Image Source: Reuters
![Visa’s cross-border volume growth tapers off.
Image Source: Reuters](https://www.dooprimenews.com/wp-content/uploads/2024/07/14-1.png)
Image Source: Reuters
Raymond James analysts also expressed caution, stating, “We would not be surprised to see shares more range-bound over the next few months until there is greater clarity on the FY25 guide.”
Other payment giants like Mastercard, PayPal Holdings, and Block also saw declines in their share prices, down 2.5%, 1%, and 2.6% respectively. Visa noted that payment volumes in the Asia Pacific region, particularly in China, have slowed due to challenging economic conditions driven by a prolonged property crisis and weak business sentiment.
This trend is echoed by other major U.S. companies such as Coca-Cola, PepsiCo, and Domino’s Pizza, which also reported pressures on lower-income consumers in their latest quarterly earnings. Earlier this month, PepsiCo CEO Ramon Laguarta highlighted increasing price sensitivity among consumers, stating, “We’re seeing much more price sensitivity and consumers looking for more value.”
Other News
Big Tech Stocks Tumble, Nasdaq’s Worst Day
A widespread selloff in Big Tech stocks led to the Nasdaq Composite’s steepest drop since 2022, erasing hundreds of billions in market value from major tech companies.
Blackstone Mortgage Fund Faces Office Vacancy Strain
Blackstone Mortgage Trust’s shares dropped 10% as it cut dividends by 24% amid ongoing difficulties from underutilized office spaces, reflecting broader troubles in the commercial real estate sector.
ECB Focuses on Geopolitical Risk Post-Russia Sanctions
The European Central Bank is developing a new framework to assess the impact of geopolitical risks on banks, spurred by the financial repercussions of sanctions on Russia.