Visa Stock Plunges: Here's Why This Analyst Is Bullish

Business Insider

14-06-2025

Visa (NYSE:V) was amongst several payment processor stocks taking a hit in Friday's trading as crypto's ongoing march toward mainstream adoption has sparked concerns about the implications for the group.
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Specifically, the Wall Street Journal reported that major retailers are seriously looking into using stablecoins as a way to sidestep the high fees tied to traditional card payments. Companies like Walmart and Amazon have apparently explored creating their own U.S.-based stablecoins, a shift that could potentially save them billions in processing costs by moving away from the conventional banking and card network infrastructure.
If either Walmart or Amazon were to launch such a payment system, it could pose a major threat to traditional financial institutions, especially regional and community banks. These retailers not only have enormous customer and employee bases, but also access to massive amounts of consumer data and far fewer regulatory hurdles than banks. That combination has long made them powerful, and potentially disruptive, players in the financial space.
Stablecoins are digital tokens typically pegged one-to-one with a government-issued currency like the dollar. They're backed by reserves such as cash or U.S. Treasurys and are currently used mainly for storing value or trading other cryptocurrencies.
Whether these retail-led stablecoin projects move forward will likely depend on the outcome of the Genius Act, a bill that would lay the groundwork for stablecoin regulation in the U.S. The legislation recently passed a key procedural step but still needs to clear both the Senate and the House.
So, credit card use might get switched to crypto, marking a continuation of sorts as Visa's growth has long been powered by people switching from cash to cards, historically accounting for about two-thirds of its volume growth.
For Mizuho's Dan Dolev, an analyst who covers both crypto and payment platforms, a big issue he recently mulled revolved around how much 'US cash conversion runway' remains. Dolev's deep dive into different spending categories suggests that Visa's slower-than-expected growth compared to overall U.S. consumer spending since the pandemic isn't necessarily a sign of weakness. Instead, it's mainly because Americans have been spending more in areas that don't typically rely on cards, like rent or healthcare, and less in card-heavy areas like travel or dining.
The good news is this trend is beginning to reverse. More importantly, Dolev believes there's still a lot of untapped potential for card adoption in the U.S. While consensus estimates put card penetration at 80 to 90%, the analyst thinks the real figure is closer to 75%.
'This leaves room for another decade of solid top-line growth domestically. Plus, V's performance in Canada & Nordics offers evidence of above-PCE growth, even when card penetration is >90%,' Dolev said.
But whether stablecoin adoption changes all that remains to be seen.
All told, for now, Dolev rates V shares as Outperform (i.e., Buy), while his $425 price target makes room for 12-month returns of 20%. (To watch Dolev's track record, click here)
The rest of the analyst community remains firmly in V's corner too; the stock claims a Strong Buy consensus rating, based on a mix of 24 Buys and 4 Holds. The average price target stands at $388.85, implying shares will climb 10.5% higher in the months ahead. (See Visa stock forecast)
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