Visa price target raised to $320 from $305 at Jefferies

Jefferies raised the firm’s price target on Visa (V) to $320 from $305 and keeps a Buy rating on the shares. The spread between Visa and MasterCard’s (MA) combined U.S. payment volume growth and U.S. PCE growth has shrunk, which is prompting fear that structural growth in the U.S.has reset lower with easing secular cash-to-card tailwinds after an accelerated shift during the pandemic, the analyst tells investors. However, the firm found that higher contribution from non-carded categories within PCE and declining fuel prices are partially responsible for network volumes compressing and when it adjusts for the transitory dynamics around inflation and fuel, the relative growth rates look “marginally better,” even though the firm concludes that most of the spread compression is attributable to a slower pace of cash-to-card.