Visa Inc.

The stable outlook on Visa reflects S&P Global Ratings' expectation that--despite the pandemic weighing on earnings and operating cash flow--the company will maintain low leverage and robust liquidity without any major disruptions in the next two years from technological advancement, litigation, or regulation. More specifically, we expect Visa to operate with debt to EBITDA around 0.7x-1.0x, as we measure it, and with EBITDA margins near 70%. We expect the ongoing economic rebound, vaccine distribution, and government support measures to help Visa's earnings and cash flow rise following the March 2021 quarter. We could lower our ratings on Visa if: Its leverage rises significantly, particularly if debt to EBITDA approaches or exceeds 1.5x without a plan to materially reduce it; It

...Visa Inc. is the operator of the largest retail payment network outside of China. Its ubiquity among consumers, merchants, and banks helps protect its market position. The pandemic has weighed on the company's robust earnings, but we expect a rebound. The pandemic has strained Visa's strong earnings, especially with a sharp drop in cross-border payments, but we expect the company to report better results following the March 2021 quarter as vaccines are more widely distributed. Visa has low leverage and generates strong cash flow. Its debt to EBITDA, on a trailing 12-month basis, rose, but remained low at about 0.8x for fiscal 2020 (ended in September). The company's ability to generate robust cash flow should keep leverage below 1x on a weighted average basis in the next two years. Visa faces regulatory, legal, and counterparty risks and long-term threats from technological disruption. Visa has performed well over many years despite lawsuits and regulatory challenges relating to the card...

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