Visa Inc.

The stable outlook on Visa reflects S&P Global Ratings' expectation that 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 of 0.3x-0.6x, as we measure it, and with EBITDA margins near 70%. 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 suffers losses on its settlement exposure that erode its financial position or call into question its risk management; Existing or new regulatory or legal obstacles prove more problematic than we currently anticipate; or

...Visa Inc. is set to remain the operator of the largest retail payment network outside of China. Its ubiquity among consumers, merchants, and banks helps protect its market position. We believe Visa will maintain low leverage and continue to generate strong cash flow. Visa's earnings continue to improve, driven by secular growth in electronic payments and the strong performance of its services business, which accounts for about 20% of its total revenues and will likely grow faster than the payments segment. We believe net revenue growth should remain at 10%-12% for the entire 2023 and moderate afterward. We expect Visa's strong market position in the payments industry as well as diversity from its ancillary services to support its financial performance, even as the possibility of an economic slowdown rises. The company's ability to generate robust cash flow should keep leverage, as measured by adjusted debt to EBITDA, below 0.6x on a weighted average basis at least in the next two years....

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