Ahead of the Bell: Analyst boosts Visa rating

AP News
Posted: Dec 14, 2009 8:05 AM

Shares of Visa Inc. climbed in premarket trading Monday as an analyst upgraded the payments processor, citing improved transaction levels, volume and international travel.

Additionally, on Friday Standard & Poor's said Visa will be added to the S&P 500 index after market close on Dec. 18. Visa, based in San Francisco, will replace telecommunications and network equipment company Ciena Corp. on the index.

Visa's stock added $2.96, or 3.6 percent, to $84.30 ahead of Monday's market open.

David Koning of Baird lifted his rating on Visa to "Outperform" from "Neutral" and increased his share price target to $100 from $88.

"We expect reaccelerating growth over the next couple quarters, along with annual earnings-per-share growth of more than 20 percent over the next couple years, and expect both to drive strong stock performance over the next year," Koning wrote in a note to clients.

The analyst indicated that retail sales are getting better and international travel is not down as much as it was a year ago, which is helping Visa's business.