Bernstein: Visa’s growth guidance meets expectations; the next valuation uplift hinges on AI payments and new services

Where did fourth-quarter growth come from?

Visa’s net revenue in the fourth quarter of fiscal 2026 was approximately 12.14 billion dollars, up 13% year over year and in line with market consensus; adjusted earnings per share were 3.48 dollars, up 17% and approximately 1% above consensus.
Global payment volume grew 9.5% year over year on a constant-currency basis, with US growth of approximately 9.7%; cross-border payment volume excluding transactions within the EU grew 14%. International transaction revenue, however, grew only 8% year over year, with the gap mainly reflecting lower foreign-exchange volatility than a year earlier and changes in transaction mix.
Value-added services revenue grew 31% year over year on a constant-currency basis to 4 billion dollars, driven by World Cup-related marketing services, pricing and the acquisition of Prisma. Data processing revenue rose 16% year over year, outpacing the 10% growth in processed transactions, with contributions from pricing, value-added services and a higher share of cross-border transactions.

Visa expects both net revenue and operating expenses to grow at low-double-digit rates on an organic, constant-currency basis in fiscal 2027, with adjusted earnings per share growth ranging from low double digits to the low teens. Bernstein believes the guidance is broadly in line with consensus.
Approximately 25% of the company’s contracts are due for renewal in fiscal 2027, including several large clients, and growth in client incentives is expected to accelerate. Such incentives reduce revenue; incentives grew 21% year over year in the fourth quarter, up from 18% in the third quarter, and their growth rate was approximately 3 percentage points above consensus.
Management expects the contribution from pricing in fiscal 2027 to be roughly comparable to fiscal 2026, but with benefits more weighted toward the second half; foreign-exchange fluctuations will weigh on revenue, with the largest impact in the second quarter. The guidance also assumes resilient consumer spending and trends in affected Middle East cross-border corridors remaining broadly at fourth-quarter levels.

Value-added services accounted for approximately 32% of total revenue in the fourth quarter. Management expects value-added services to grow by slightly more than 20% in fiscal 2027, even without a boost from the World Cup and the Olympics.
Bernstein believes more than 80% of the drivers of value-added services business are tied to underlying activity such as transactions, cards and accounts, while pricing and client demand also provide support. Issuing, acceptance, and risk and security services each grew 20% on a constant-currency basis in fiscal 2026.
Cybersecurity is a key client need, and Visa already provides related services and includes them in broader client agreements. Bernstein believes cybersecurity and payment token services could jointly support growth in value-added services.

Bernstein believes Visa’s more readily achievable valuation recovery is complete, and the next phase will depend on progress in AI agent payments, cybersecurity demand and the stablecoin business. The firm maintains its outperform rating and 475-dollar price target, based on forecast fiscal 2027 earnings per share of 15.30 dollars and a price-to-earnings multiple of 31.
In AI agent payments, Visa seeks to verify the user’s identity, authorization and purchase instructions behind an agent. Bernstein believes whether payment networks can control agent payment tokens will affect their opportunities to expand tokens, value-added services and transaction volume; Visa already has approximately 50 AI partners live, but adoption remains small in scale.
In stablecoins, Visa supports 225 linked-card programs, up 70% from a year earlier, with related transaction volume up 150%. The annualized run rate of stablecoin settlement volume exceeds 25 billion dollars and has risen to 10 times its year-earlier level, but Bernstein believes its current financial contribution remains small.