Visa: Weak Consumer Plus Interchange Lawsuit Is Bad


  • I previously rated Visa Inc. stock as a hold, but I am now downgrading to a strong sell due to the rejected $30 billion settlement and weakening consumer spending trends.
  • A lawsuit rejection by a federal judge in Brooklyn raises concerns about Visa’s legal standing and potential impact on earnings and financial health.
  • Regulatory challenges and the macroeconomic environment are both not in Visa’s favor, leading to a potential revenue decline now exceeding my estimated $1.6 billion.
  • With this, I think the Visa P/E ratio needs to come down.

Investment Thesis

After previously rating Visa Inc. (NYSE:V) a hold in March, I believe the stock now is a strong sell. However, with recent developments, my view of the stock’s future has turned negative.

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