Visa shares moved lower earlier in the session after the payments company beat earnings and revenue expectations, with investors focusing on guidance that pointed to a moderation in near-term growth. The results arrive amid heightened political scrutiny of credit card fees and new initiatives tied to consumer savings.
BNN Bloomberg spoke with Nate Svensson, senior equity research analyst at Deutsche Bank, about why the stock reaction was muted despite a strong quarter, how regulatory headlines could affect sentiment, and what investors should watch as growth comparisons normalize later in the year.
Key Takeaways
- Visa’s earnings and revenue topped expectations, but guidance signalling slower sequential growth weighed on investor sentiment.
- Consumer spending remained resilient, supporting volumes in both domestic and cross-border transactions.
- Softer FX volatility limited growth in higher-yielding international transaction revenues.
- Regulatory proposals in Washington are creating headline risk, though the likelihood of passage appears low.
- Growth comparisons are expected to ease later in the year, which could support improving momentum in the back half.
Read the full transcript below:
LINDSAY: The earnings parade is in full force this week. Visa beat estimates, bolstered by stronger spending. That comes just after the credit card company announced plans to allow cardholders to direct cash-back rewards into so-called Trump savings accounts.For more on this, we’re joined by Nate Svensson, senior equity research analyst at Deutsche Bank. Nate, good to have you with us. Thanks so much.
NATE: Yeah, thanks for having me, Lindsay.
LINDSAY: Let’s get into the Donald Trump news in a moment, but to start, the share price is up now after the opening bell, though it was trending down earlier this morning. Why do you think that is?
NATE: Yeah, listen, all told, these were really solid results from Visa, but there were a few puts and takes that weighed on the stock earlier.Starting with the positives, Visa delivered a solid top-line beat, underpinned by resilient consumer spending. Volume and transaction growth came in right in line with our estimates, and Visa’s value-added services business continues to grow strongly, up 28 per cent in fiscal first quarter. The company also benefited from incentives, which are a contra-revenue line item, coming in lighter than expected, largely due to deal timing.
On the flip side, margins were a bit softer than expected. Operating expense growth was higher than guidance, coming in at 14 per cent on an adjusted basis, versus low double-digit guidance. That was largely driven by marketing spend around the Olympics and the World Cup. As a result, earnings per share beat consensus by about three cents, despite roughly 300 basis points of outperformance on the top line.
There was also some focus on international transaction revenue growth. Investors spend a lot of time watching cross-border volumes, which are a higher-yielding revenue stream. The spread between cross-border volume growth and international transaction fee growth was wider than expected this quarter. Visa benefits from FX volatility, and FX volatility came in lower than anticipated, which weighed on that line item.
Taken together, the consumer remains healthy and resilient, both in the U.S. and globally. The company reiterated its 2026 guidance on both the top and bottom line, which is what we expected. Some investors may have been hoping for a guidance raise, particularly after a strong first quarter, and I think that explains the early pressure on the stock.
LINDSAY: With that said, the company’s fiscal second-quarter outlook implied a step-down in sequential growth. What does that mean moving forward?
NATE: I think that was pretty well understood by most investors and analysts. A lot of it comes down to year-over-year comparisons. Growth was very strong in fiscal second quarter last year, so the comp is tougher. On a like-for-like basis, growth is stepping down modestly.
The company guided to low double-digit organic constant-currency growth for the quarter. We were at about 11 per cent heading into earnings, so the delta wasn’t that large. Comps ease in the back half of the year, and growth should improve from there.
LINDSAY: Let’s bring in Donald Trump now. Earlier this month, Trump announced the Credit Card Competition Act, which would place a 10 per cent cap on credit card interest rates for one year. How could that affect Visa?
NATE: It’s been tough from a headline perspective, but we still like Visa. We have a buy rating and a US$410 price target. Shares have underperformed year to date, and a lot of that is noise coming out of Washington.
There are two related but distinct issues: the Credit Card Competition Act, and the proposed 10 per cent interest-rate cap. The Credit Card Competition Act has been around since 2022 or 2023 and has largely been dead on arrival due to broad bipartisan opposition. While it does have bipartisan sponsors, it hasn’t gained traction. Trump’s recent comments added uncertainty, but we still think the base case is that it does not get enacted.
Visa management reiterated on the earnings call that they believe the bill would be negative for consumers and said they are actively engaging with legislators.
As for the proposed interest-rate cap, that would not directly impact Visa’s business model, since it applies to issuing banks, not the network. Bank executives have been clear that such a cap would reduce credit availability, particularly for lower-income consumers. We think the likelihood of either measure being enacted is low, and that these issues are largely headline risks for the stock.
LINDSAY: What about Visa’s plan to allow cardholders to direct cash-back rewards into new Trump savings accounts? There’s been a lot of attention on how intertwined Visa has become with politics this week.
NATE: Yeah, it’s certainly drawn attention. Ultimately, Visa is focused on enabling optionality for consumers. From what we’ve heard, there could be meaningful uptake for these savings programs, and Visa wants to allow cardholders to use rewards in ways that support longer-term financial stability for their families.
From a fundamentals standpoint, though, we see this as marginal. It’s unlikely to have a material impact on growth or the company’s trajectory. It’s about flexibility and consumer choice, whether it’s these accounts or something else down the line.
LINDSAY: Nate, great to have you with us. Thanks so much for breaking it all down.
NATE: Thanks for having me.
LINDSAY: That’s Nate Svensson, senior equity research analyst at Deutsche Bank.
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This BNN Bloomberg summary and transcript of the Jan. 30, 2026 interview with Nate Svensson are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
