Visa Inc. Everywhere you want to “V” Price Target $120.00

Strong quarter all around: FQ1 was strong all-around, with broad and notable improvements in volume growth
(both credit and debit, and in the US and emerging markets). That led to very solid beats in revenue ($50M or 3%) and EPS (8 cents or 9%).

The linearity is encouraging: Transaction trends for credit, debit, and cross-border all improved during the 3 months of the quarter and are holding thru January. That is consistent with what we are hearing from issuers, processors and networks, and bodes well for near-term
results and the sustainability of the valuation even if overall market turbulence continues.

F10 guidance upped a little bit: The “low end” qualifier was removed from F10 revenue guidance (now at
11%-15%) and margins (added “high” to the mid-to-high 50%s range). This was encouraging to see after only
one quarter into the fiscal year, and despite V’s numerous mentions of it wanting to remain conservative
in its outlook given the global macro uncertainties.

Next catalyst is the Analyst Day (March 11 in SF): Our core thesis remains that V will be able to sustain
growth (and therefore its multiple) for a longer period of time than current consensus believes if the company
can continue to capture growth opportunities in newer products and emerging markets. As highlighted
repeatedly on the call by CEO Saunders, this topic and these initiatives will be the focal point of the upcoming
investor day next month. We believe it could be the next major catalyst for the stock.

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