After reporting a profit of $514 million in the fourth quarter, Rick Shane, an analyst at Jeffries & Co., said Visa is set to grow more than 20 percent going forward.
As a result, he raised his price target on the credit card company to $86 from $80.
"We were expecting a good quarter from Visa, but frankly, we were expecting it with sort of a blah, in-line topline result and good margin expansion," Shane said.
"They beat us very soundly on the topline, and that means there's more earnings power going forward."
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Along with this potential for growth, Shane said the $2 billion in free cash flow that Visa is guiding to is also significant. The company also has tremendous leverage in terms of operating, with almost 90 cents on every dollar going to its operating line.
"It is very unique to find a company this large, with this level of global penetration, where they can continue to grow earnings the way we expect Visa to," he said.
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Within the past 12 months, Jeffries and/or its affiliates received non-investment banking, securities-related compensation for client services it provided to American Express.