Visa downgraded to Neutral at BofA on limited valuation upside

As previously reported, BofA analyst Jason Kupferberg downgraded Visa (V) to Neutral from Buy with a price target of $297, down from $305. While the firm maintains a favorable view on Visa and MasterCard’s (MA) “premier” business model and competitive moat, it is making a non-consensus call and downgrading both as it sees limited upside potential to the valuation multiple and estimates, while also noting that investor positioning remains crowded. While the firm said the rating change “is not a call on the quarter,” as it sees calendar Q2 estimates as achievable amid generally stable overall consumer spending, it notes that both continue to have second half acceleration embedded in guidance and the firm struggles to see material upside to near-term estimates.