Key Points
Visa's fundamental gains are set to continue, showcasing its success at a time when consumer confidence is pressured.
The financial stock has underperformed the S&P 500 in the past five years, which can discourage investors.
Visa (NYSE: V) is a dominant force in the world of payments. Its branded cards are accepted in virtually all corners of the world. It benefits from a robust network effect. And it's poised to keep riding the wave that sees greater adoption of digital payments.
Here's one prediction for Visa in 2026.
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Smooth sailing
I predict Visa will continue to report strong fundamental performance this year. Double-digit earnings per share (EPS) growth is a likely outcome. That will build off an adjusted EPS gain of 14% in fiscal 2025 (ended Sept. 30).
Visa's success is easy to overlook
This is probably the least controversial prediction that you'll see. But it still points to the company's impressive ongoing success. Investors might take this for granted, since Visa has performed well for such a long period of time.
But consider the macro situation, which isn't exactly in the best state right now. Despite positive U.S. GDP growth indicating an expanding economy, consumer confidence just hit the lowest level since 2014.
Yet Visa keeps humming along. Investors interested in buying this financial stock might want to take a step back and first realize that Visa's total return in the past five years comes up short of the S&P 500 (SNPINDEX: ^GSPC). It might be best to wait for a better valuation if bigger gains are what you're after.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Visa. The Motley Fool has a disclosure policy.