Investors should give Visa more credit

Visa shares declined Monday after the credit card company lost a court ruling late last week in lawsuits involving credit card fees.

And investors have given the company little credit of late. Visa is one of the worst-performing stocks in the Dow Jones Industrial Average year-to-date, down around 1.5 percent. So, is the company maxed out?

"We don't have Visa in any of our advised portfolios, and we're not looking to add it anytime soon," said S&P Capital IQ's Erin Gibbs, who noted that while she loves the company's business model, she is concerned about high valuations. "Historically, it's traded between about 20.5 to 23 forward earnings, and right now it's at 22.8. Really close to the top of that range."

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Of the current stock price, Gibbs said she would be a better buyer on a 4 to 5 percent pullback. "If we see near-term volatility come in and we see anything pulling back closer to maybe something like a $210 [dollars per share] I think that would be a great place for an entry point. But right now, given its earnings outlook and where it's trading, I think there are much better opportunities out there."

According to Ari Wald of Oppenheimer, who has an "outperform" rating on the company, Visa's recent pullback is a buying opportunity. "The stock is stairstepping higher off its March lows. I think the rising channel does continue. I think we're heading back to $235 [dollars per share] resistance."

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