Why Visa Stock Is Morgan Stanley's 'Top Pick' for 2025 -- Barrons.com

By Emily Dattilo

Visa is a Morgan Stanley "top pick" for 2025, analysts led by James Faucette said on Wednesday. They believe the payments and processing sector will turn a corner and offered three key themes to support their view.

First, "investors have begun to revisit the payments space, and we expect renewed enthusiasm to persist in 2025," the analysts wrote, pointing to increased appreciation for sustainable growth, among other reasons.

Second, a survey of thousands of U.S. consumers found that the financial aspirations of Generation Z and Millennial consumers don't differ much from past generations, which should favor traditional financial services -- like credit cards -- and companies that lean into travel benefits, the analysts wrote.

Third, fintechs should focus on heightened specialization amid high capital costs and profitability pressures, analysts added.

Other industry themes include the opportunity for more mergers and acquisitions and a less restrictive regulatory environment.

Visa was crowned their top pick due to "attractive valuation, benefits from travel + value added services, easing regulatory scrutiny, and favorable tactical trading dynamics." The team raised their price target on the stock to $371 from $326 and reiterated an Overweight rating.

Shares of Visa were 0.7% higher at $320.67 in Wednesday morning trading.

The Morgan Stanley analysts also boosted their price targets on several other stocks:

   -- Mastercard (Overweight) to $654 from $564 
 
   -- Fiserv (Overweight) to $258 from $220 
 
   -- Global Payments (Overweight) to $166 from $156 
 
   -- PayPal (Equal Weight) to $90 from $76 
 
   -- Fidelity (Equal Weight) to $92 from $87 
 
   -- Shift4 Payments (Equal Weight) to $109 from $90 
 
   -- Block (Underweight) to $65 from $60 

Write to Emily Dattilo at emily.dattilo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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December 18, 2024 11:04 ET (16:04 GMT)

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