Visa's Earnings Could Impress, But Tariff Risks Loom Large
The Visa logo, the American multinational payment card services corporation and the world's ... More second-largest card payment organization, appears on a MacBook in Barcelona, Spain, on February 10, 2025. (Photo by Joan Cros/NurPhoto via Getty Images)
Visa (NYSE:V) is scheduled to announce its earnings on April 29. According to consensus estimates, revenues are anticipated to increase by roughly 9% compared to the previous year, reaching $9.55 billion, while adjusted earnings are projected at approximately $2.68 per share, slightly above last year's figure. This growth is expected to be fueled by increasing payment volumes and higher cross-border volumes, which are generally more profitable. However, investors will pay closer attention to Visa's outlook. The U.S. economy may encounter several challenges in the near future due to tariffs introduced by President Donald Trump on key trading partners. This situation could significantly affect Visa, considering that its operations are closely linked to consumer spending and international travel volumes.
Visa currently holds a market capitalization of $580 billion. Over the past twelve months, revenue totaled $37 billion, and the company has been operationally profitable, reporting $24 billion in operating profits and a net income of $20 billion. Therefore, for those seeking potential gains with less volatility than specific stocks, the Trefis High Quality portfolio offers a viable alternative, having outperformed the S&P 500 and achieved returns exceeding 91% since its launch.
See earnings reaction history of all stocks
Here are some insights about one-day (1D) post-earnings returns:
Additional information regarding observed 5-Day (5D) and 21-Day (21D) returns following earnings is summarized alongside the statistics in the table below.
A relatively lower-risk strategy (though it may not be effective if the correlation is weak) involves understanding the correlation between short-term and medium-term returns after earnings, identifying pairs with the strongest correlation, and executing the appropriate trades. For example, if 1D and 5D demonstrate the highest correlation, a trader could take a "long" position for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data based on a 5-year and a 3-year (more recent) history. Please note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and the following 5D returns.
V Correlation Between 1D, 5D, and 21D Historical Returns
Post-earnings stock reaction can sometimes be influenced by peer performance, and this pricing-in might even start before the announcement. Below is historical data comparing Visa stock's past post-earnings one-day (1D) returns with the 1D post-earnings returns of peers that reported just prior to Visa, allowing for a fair comparison.
V Correlation With Peer Earnings
Discover more about the Trefis RV strategy which has outpaced its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000) to deliver strong returns for investors. Alternatively, if you desire potential growth with a steadier experience than an individual stock like Visa, explore the High Quality portfolio, which has outperformed the S&P and achieved returns exceeding 91% since its inception.
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