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Investing.com – Morgan Stanley named Visa Inc (NYSE:) is his top stock pick in the payments sector for 2025 due to its strong growth prospects through international travel, value-added services and new payment flows.
The brokerage firm remains overweight on Visa and Mastercard (NYSE:), favoring their defensible business models, strong operating leverage and limited competition.
“We include V as our top pick for 2025 due to attractive valuation, travel and value-added services advantages, ease of regulatory scrutiny and favorable tactical trading dynamics,” the analyst said.
Morgan Stanley (NYSE:) expects both companies to deliver double-digit earnings growth with potential for modest valuation appreciation.
Visa’s valuation appears particularly attractive on a growth-adjusted basis compared to comparable consumers, the statement said. Morgan Stanley also highlighted lower regulatory risks and potential benefit from an increase in institutional ownership as key drivers for the stock.
Investors’ perception that Visa stock is overvalued relative to stocks may be misplaced, Morgan Stanley said, noting that Visa’s current ownership levels remain below historical averages.
The brokerage expects a near-term tailwind for Visa from increasing international travel and a possible reversal of the recent inverse correlation with banks’ outperformance.
