Visa to rally 18 percent on strong earnings and reasonable valuation, Guggenheim says

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Investors should buy Visa shares because its profit growth will top industry peers in the coming years, according to Guggenheim, which raised its rating on the payments company to buy from neutral.

"Our upgrade is motivated by our outlook for the company's earnings growth and that we now view risk/reward at the current valuation as attractive," analyst Eric Wasserstrom wrote in a note to clients Monday.

"V's secular volume story is strong, and Visa Europe provides margin expansion opportunity. Our investment thesis on V is that it will generate above-peer earnings growth."