Equity valuation of Visa Inc.

Abstract

This dissertation evaluates the fair equity value of Visa Inc., one of the world’s leading digital payment networks. The analysis applies two intrinsic approaches, the discounted cash flow model and the adjusted present value model, together with a relative valuation based on trading multiples. The results imply a share price of $262.38, representing a 23.2% discount to the prevailing market price. Visa generates revenues from payment volumes, transactions, and value-added services. Structural growth is supported by the global shift from cash to digital payments, particularly in emerging markets. At the same time, increasing regulatory scrutiny in the U.S. and Europe and competition from new payment providers pose risks to profitability. Despite these challenges, Visa’s scale, brand strength, and network effects ensure robust cash generation. The findings are contrasted with recent analyst reports, which suggest price targets ranging from $306 to $367. Higher valuations are largely driven by the use of elevated P/E multiples or optimistic terminal growth assumptions paired with lower discount rates. In comparison, this thesis applies more realistic assumptions, anchored in long-term economic fundamentals and Visa’s actual cost structure, leading to a clear Sell indication. While Visa remains financially solid, its dominant market share leaves it with more to lose than to gain. Intensifying competition, rising client incentives, and regulatory risks further support the conclusion that the stock appears overvalued at current levels.

Date of Award	14 Oct 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)