Visa Inc (NYSE: V) is still down more than 15% from its all-time high, which, as per Gina Sanchez (Chief Market Strategist at Lido Advisors), means an opportunity to build a position in this high-quality growth name at a discount.
Visa is somewhat insulated from higher rates
Sanchez is convinced the California-based financial services firm can withstand the current macro environment after it reported better-than-expected Q3 results in July. On CNBC’s “The Exchange”, she said:
One of the reasons that Visa has been able to post great earnings is because as interest rates have been rising, they’ve also been raising their own interest rates that they charge their clients or customers. So, you’re somewhat insulated from that.
Earlier this month, Visa suspended business with Pornhub to reiterate its support in the fight against illegal and criminal activities, including child pornography.
The stock currently trades at a trailing 12-month price-to-earnings multiple of 32.43.
Consumer spending seems to be holding steady
More importantly, Sanchez added, the multinational is a great pick since consumer prices, even though they’re at a multi-decade high, have so far failed to trigger a “meaningful” decline in consumer spending.
Spending has continued. There’s been no evidence of a pullback, according to Visa CFO. The only thing that’s changed is what they spend on, not their spending. So, spending habits have maintained a good clip.
She dubs Visa a great way to be exposed to “growth” without a risk of a hit from higher rates.
Her view is in line with Wall Street that currently has a consensus “buy” rating on the stock with upside to $260 on average – a 23% increase from here.
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