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Visa (V) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Visa (V - Free Report) closed at $137.02, marking a -0.75% move from the previous day. This change lagged the S&P 500's daily loss of 0.53%. Elsewhere, the Dow lost 0.36%, while the tech-heavy Nasdaq lost 0.94%.

Heading into today, shares of the global payments processor had gained 0.38% over the past month, outpacing the Business Services sector's loss of 0.69% and the S&P 500's loss of 1.47% in that time.

V will be looking to display strength as it nears its next earnings release, which is expected to be January 30, 2019. On that day, V is projected to report earnings of $1.25 per share, which would represent year-over-year growth of 15.74%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.40 billion, up 11.01% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.32 per share and revenue of $22.83 billion, which would represent changes of +15.4% and +10.77%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for V. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.04% higher within the past month. V currently has a Zacks Rank of #3 (Hold).

Digging into valuation, V currently has a Forward P/E ratio of 25.97. For comparison, its industry has an average Forward P/E of 17.08, which means V is trading at a premium to the group.

Also, we should mention that V has a PEG ratio of 1.5. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Financial Transaction Services was holding an average PEG ratio of 1.33 at yesterday's closing price.

The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 210, putting it in the bottom 18% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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