Market Performance - The broad U.S. market started the year positively, with the SPDR® S&P 500® ETF (SPY) posting a gain despite some elevated volatility in the final week of January [1]

Core Insights - Visa held its 2026 Annual Meeting of Shareholders virtually, where shareholders voted on eight proposals, including director elections and executive compensation [3] - The company reported strong fiscal 2025 results with $40 billion in net revenue, an 11% increase year-over-year, and returned $22.8 billion to shareholders through dividends and buybacks [5][13] Shareholder Proposals - Shareholders approved the election of all 11 directors, the advisory vote on executive compensation, auditor ratification, and amendments to the certificate of incorporation, while rejecting all four shareholder-sponsored proposals [6][11] - The rejected proposals included requests for an independent chair policy, action by written consent, an online sexual exploitation report, and an inclusion program ROI report [6][11] Financial Performance - Visa's GAAP EPS was $10.20 (up 5%) and non-GAAP EPS was $11.47 (up 14%) for fiscal 2025 [5][13] - The company processed $16.7 trillion in total volume, an increase of 7% on a constant-dollar basis, and 329 billion total transactions, up 8% [14] Strategic Highlights - Management emphasized progress in digital payments, including over 16 billion Visa tokens and more than 50% tokenization of e-commerce transactions [4][15] - Visa aims to build an interoperable layer between stablecoins and traditional fiat payments, viewing stablecoins and central bank digital currencies as significant opportunities [18] Capital Allocation - The company outlined four capital allocation priorities: investing in the business, returning 20-25% of EPS via dividends, returning excess capital through buybacks, and maintaining a target gross debt-to-EBITDA ratio below 1.5x [19]

Core Viewpoint - The recent sell-off in Mastercard and Visa stocks presents a significant buying opportunity for long-term investors despite concerns over consumer spending and proposed interest rate caps [1]. Financial Performance - Mastercard's revenue increased by 18%, while Visa's revenue rose by 15% [4]. - Mastercard's operating income grew by 25%, with operating margins reaching 55.8% and diluted EPS increasing by 24% [4]. - Visa's operating margin was 61.8%, with non-GAAP EPS rising by 15% [4]. Market Dynamics - Both companies reported high-single-digit to low-double-digit increases in payment volume and frequency, indicating resilience in their business models [5]. - The fee structure of Mastercard and Visa is based on transaction frequency and total sales, making them somewhat recession-resistant [5]. Shareholder Returns - In 2025, Mastercard returned $11.73 billion through stock buybacks and $2.76 billion in dividends, while Visa's latest quarter saw $3.73 billion in buybacks and $1.29 billion in dividends [8]. - Both companies yield less than 1% due to a preference for buybacks over dividends, but if funds were reallocated, Mastercard could yield about 3% and Visa about 3.1% [9]. Valuation and Investment Thesis - Both stocks are considered reasonably valued based on price-to-free cash flow and forward earnings expectations [10]. - Mastercard and Visa are viewed as foundational stocks for long-term portfolios due to their strong business models and global network effects [12]. Regulatory Environment - Concerns about capping credit card interest rates at 10% may persist, but it is believed that such a low cap would lead financial institutions to restrict credit access, ultimately harming consumers [13].

Core Insights - Visa Inc. is recognized as one of the 12 Best Stocks to Buy for the Long Term [1] - Piper Sandler has adjusted its price target for Visa shares from $165 to $160 while maintaining an Overweight rating [2] - Visa's revenue is projected to grow at a compound annual rate of 12.9% from fiscal 2020 to fiscal 2025, with expectations of continued double-digit growth in the coming years [3] Market Dynamics - The U.S. remains Visa's largest market, but faster growth is anticipated in emerging economies such as parts of Asia, Africa, and Latin America, where digital payments are still evolving [4] - The shift towards cashless and electronic payments, along with Visa's value-added services like analytics, consulting, and cybersecurity, are key drivers of growth as commerce becomes more digital [2][4] Company Overview - Visa Inc. operates as a global payments technology company, facilitating commerce and money movement across over 200 countries and territories [5]

Core Insights - Visa's stablecoin settlement volume has reached an annualized level of approximately $4.6 billion, representing a growth of about 4.6 times since September 2025 and an 18-fold increase since the beginning of the year [1] Group 1: Stablecoin Settlement Growth - The demand for stablecoin settlements is coming from both native crypto clients and traditional financial institutions [1] - Visa has expanded its USDC-based stablecoin settlement capabilities domestically to enhance settlement efficiency and liquidity for banks and fintech companies [1] Group 2: Modernization of Financial Management - The expansion of stablecoin settlement capabilities is aimed at modernizing corporate cash management systems [1]

Core Insights - Visa and Mastercard are positioning themselves as essential links between blockchain technology and everyday commerce, moving from conceptual frameworks to practical implementations in the stablecoin space [1][3]. Visa's Developments - Visa reported a global stablecoin settlement run rate of $4.6 billion and has enabled stablecoin card issuance in over 50 countries, emphasizing its commitment to integrating digital assets into daily payments [4]. - The company is expanding stablecoin settlement with USDC in the U.S. to enhance speed and liquidity for banks and FinTechs, and has launched a global stablecoins advisory practice to assist clients with strategy and technology [5]. - Visa's management clarified that stablecoin initiatives are additive to existing business operations, focusing on enhancing on-ramps, off-ramps, and settlement services [6]. Mastercard's Approach - Mastercard views stablecoins as an additional currency rather than a disruptive force, emphasizing their role in facilitating transactions through a trusted global network [8]. - The company is actively enabling stablecoin purchases and settlements, collaborating with partners like MetaMask and Gemini to expand its capabilities [10]. - Mastercard is integrating stablecoins into its broader strategy of agentic commerce, where AI-driven agents conduct transactions, highlighting the importance of trust and interoperability in payment networks [11]. Market Opportunities - Both Visa and Mastercard see significant market opportunities for stablecoins in regions with high currency volatility and limited access to U.S. dollars, as well as in cross-border payment scenarios [7][13]. - Visa is working with over 100 partners on agentic commerce, integrating stablecoins into the same infrastructure that supports real-time payouts and tokenization [11]. Regulatory Landscape - The operational advancements of Visa and Mastercard are occurring alongside evolving regulatory frameworks, with recent developments indicating a shift towards more structured oversight of the crypto market [14][15].

Core Insights - Credit card issuers, including Visa and American Express, report strong consumer spending in the last quarter of 2025, indicating a positive outlook for the upcoming holiday season for retailers [1] Group 1: Company Performance - Visa and American Express have demonstrated robust earnings, suggesting that consumer spending remains resilient and is growing at a healthy rate [1] Group 2: Industry Implications - The positive earnings reports from credit card companies signal a strong holiday season ahead for retailers, as consumer confidence and spending are expected to continue [1]

Core Insights - Visa Inc. reported first-quarter fiscal 2026 earnings per share (EPS) of $3.17, exceeding the Zacks Consensus Estimate of $3.14, with a year-over-year increase of 15% [1][10] - Net revenues reached $10.9 billion, reflecting a 15% year-over-year growth and surpassing the consensus mark by 1.9% [1][10] Financial Performance - The strong quarterly results were driven by higher payments and cross-border volumes, supported by resilient consumer spending, although offset by increased operating expenses and lower-than-expected processed transactions [2] - Payments volume increased by 8% year over year on a constant-dollar basis, with processed transactions growing 9% to 69.4 billion, slightly missing the consensus estimate of 69.8 billion [3] - Cross-border volume rose 12% year over year on a constant-dollar basis, with an 11% increase when excluding transactions within Europe [4] Segment Performance - Service revenues increased 13% year over year to $4.8 billion, exceeding the model estimate of $4.6 billion [5] - Data processing revenues grew 17% year over year to $5.5 billion, meeting the model estimate [5] - International transaction revenues rose 6% year over year to $3.7 billion, missing the estimate of $3.8 billion, while other revenues climbed 33% year over year to $1.2 billion, surpassing the estimate of $1.1 billion [6] Operating Expenses and Cash Flow - Adjusted operating expenses increased 16% year over year to $3.4 billion, higher than the estimate of $3.3 billion, with interest expenses rising 6.6% to $194 million [7] - The company generated net cash from operations of $6.8 billion, a 25.6% year-over-year increase, with free cash flows recorded at $6.4 billion, up 26.7% year over year [11] Capital Deployment - Visa returned $5.1 billion to shareholders through share buybacks ($3.8 billion) and dividends ($1.3 billion) in the December quarter, with $21.1 billion remaining under its repurchase program as of Dec. 31, 2025 [12] - A quarterly cash dividend of 67 cents per share is scheduled for payment on March 2, 2026 [12] Outlook - For Q2 FY26, net revenues are expected to witness high-end low-double-digit growth, with adjusted operating expenses anticipated to grow in the high-end of mid-teens digits [13] - For FY26, net revenues are projected to grow in the low double digits, with EPS growth expected in the high-end of low-double-digits [14]

Core Insights - Visa Inc. is a well-established company with a significant global presence, facilitating money movement for consumers, merchants, banks, and governments worldwide [1] Company Overview - Visa operates as a critical component of the global financial infrastructure, enabling transactions across various platforms and regions [1] Investment Perspective - The analysis focuses on providing objective, data-driven insights, particularly on small- to mid-cap companies, while also considering large-cap firms like Visa to offer a comprehensive view of the equity markets [1]

Core Insights - Visa Inc. is a well-established company with a significant global presence, facilitating money movement for consumers, merchants, banks, and governments worldwide [1] Company Overview - Visa operates as a critical component of the global financial infrastructure, enabling transactions across various platforms and regions [1] Investment Perspective - The analysis focuses on providing objective, data-driven insights, particularly on small- to mid-cap companies, while also considering large-cap firms like Visa to offer a comprehensive view of the equity markets [1]