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Jan. 21, 2020, 1:14 p.m. EST

Visa stock heads toward longest win streak in a decade, as analyst says it’s a smart bet on millennials

Visa shares are on track to rise for the ninth straight trading session

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By Emily Bary


Krisztian Bocsi/Bloomberg
Macquarie is upbeat about Visa’s ability to benefit from millennial interest in debit purchases as well as the growing trend of real-time payments.

Shares of Visa are on track to notch their longest win streak since 2009, with a potential ninth straight gain, as an analyst said the stock looks like a smart way to bet on millennial finance trends.

The credit-card giant’s stock was last up 1.4% in Tuesday afternoon trading and on pace to hit yet another all-time high. If shares of Visa close higher to end the day’s session, it will match its longest win streak since Oct. 15, 2009, according to Dow Jones Market Data.

Gains for shares of Visa /zigman2/quotes/203660239/composite V -4.80%  on Tuesday come on the heels of a bullish endorsement from Macquarie analyst Dan Dolev, who initiated coverage of the payments company with an outperform rating in a note titled: “For Millennials, Buy Visa; For Everything Else, Buy Mastercard.”

Read: MTA expands tap payments to Penn Station after seeing 4 million taps since rollout began

Young adults are increasingly using debit for their everyday spending, which Dolev said will benefit Visa as well as rival Mastercard Inc. /zigman2/quotes/207581792/composite MA -4.42% , though Visa has twice Mastercard’s debit volumes. Visa also generates a greater portion of its purchase volume from debit transactions.

Those young consumers have a stronger preference for debit cards over other payment methods than their older cohort, according to a Federal Reserve survey, which can help the card networks in their quest to digitize payments that would otherwise occur via fiat money or paper checks.

Several popular new forms of payment rely on debit rails behind the scenes. Millennials can fund peer-to-peer accounts like PayPal Holdings Inc.’s /zigman2/quotes/208054269/composite PYPL -2.55% Venmo and Square Inc.’s /zigman2/quotes/205989440/composite SQ -3.93%  Cash app using their debit credentials. In addition, both Visa and Mastercard are betting big on “push” payments, letting companies leverage the card networks to pay gig economy workers, for example, whereas card credentials were typically just seen as ways for people to pay for things themselves.

Don’t miss: Visa makes another move beyond credit cards with $5.3 billion deal for Plaid

Dolev sees real-time push payments as a $10 trillion opportunity in the U.S., consisting of $1 trillion in peer-to-peer payments and $9 trillion in business disbursements. He set a $250 price target on Visa’s stock and a $365 price target on Mastercard’s, which he also rates at outperform.

Visa is due to report earnings Jan. 30 after the closing bell. Barclays analyst Ramsey El-Assal expects that the company faced several headwinds, including a greater impact from incentives, in the December quarter, but he thinks the company will show continued growth throughout the calendar year.

Shares of Visa have gained 18% over the past three months, while the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -3.56%  has risen 9.3%, the S&P 500 index /zigman2/quotes/210599714/realtime SPX -3.35% has gained 10.7% and the technology-heavy Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -3.71% has advanced more than 15% over the same period.

/zigman2/quotes/203660239/composite
US : U.S.: NYSE
$ 198.79
-10.02 -4.80%
Volume: 13.32M
Feb. 24, 2020 6:30p
P/E Ratio
37.26
Dividend Yield
0.60%
Market Cap
$426.92 billion
Rev. per Employee
$1.25M
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/zigman2/quotes/207581792/composite
US : U.S.: NYSE
$ 324.67
-15.03 -4.42%
Volume: 7.82M
Feb. 24, 2020 6:30p
P/E Ratio
40.87
Dividend Yield
0.49%
Market Cap
$326.39 billion
Rev. per Employee
$1.01M
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/zigman2/quotes/208054269/composite
US : U.S.: Nasdaq
$ 116.44
-3.05 -2.55%
Volume: 10.14M
Feb. 24, 2020 4:00p
P/E Ratio
56.23
Dividend Yield
N/A
Market Cap
$136.58 billion
Rev. per Employee
$710,138
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/zigman2/quotes/205989440/composite
US : U.S.: NYSE
$ 80.21
-3.28 -3.93%
Volume: 11.07M
Feb. 24, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$34.10 billion
Rev. per Employee
$984,824
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,960.80
-1,032 -3.56%
Volume: 458.71M
Feb. 24, 2020 5:04p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,225.89
-111.86 -3.35%
Volume: 2.75B
Feb. 24, 2020 5:04p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
9,221.28
-355.31 -3.71%
Volume: 2.75M
Feb. 24, 2020 5:16p
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Emily Bary is a MarketWatch reporter based in New York.

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