Services should keep revenue growing faster than ordinary consumer spending, even after World Cup activity fades. The market looks slightly too pessimistic, but reinvestment, regulation and high bond yields limit the expected gain enough to warrant Hold.
Key points
- 11% revenue growth in FY2027 is my forecast after event-driven spending fades.
- $15.19 a share in FY2027 is my estimate of earnings excluding exceptional charges.
- 93% cash conversion over nine months supports earnings, but legal payments matter.
The call
The market is slightly too pessimistic, not dramatically wrong. At my 27-times earnings multiple, today's price requires $13.77 a share in FY2027. With my margin and share assumptions, that permits roughly 1% revenue growth. Alternatively, investors can expect stronger growth and pay a lower multiple.
Services outrun spending, but rebates absorb some growthVisa July 28, 2026 10-Q and call; Q3 FY26 year-over-year growth; services overlap revenue.
Services should keep growth above ordinary spending. Issuing, acceptance and security services collectively grew above 20% without relying on World Cup marketing. I expect total revenue growth to ease to 11% in FY2027, not collapse. Savings will fund reinvestment, so I assume no major margin expansion. Chart volume excludes currency changes.
Valuation
| My estimate | Figure |
|---|
| FY2027 revenue | $50.9 billion |
| FY2027 adjusted operating margin, profit before interest and tax | 67.5% |
| FY2027 adjusted net income | $27.6 billion |
| FY2027 adjusted earnings per share | $15.19 |
| October 2027 earnings multiple | 27 times |
| 12-month target | $410.05 |
My model starts with 13% fourth-quarter revenue growth, then uses an FY2027 tax rate of 19%, $250 million of net non-operating expense and 1.82 billion diluted shares, including convertible classes. Stock compensation and ordinary legal fees remain expenses; exceptional litigation and severance do not. A 27-times multiple balances durable services growth against high bond yields and regulation; the modest expected gain warrants Hold, with slower-spending and faster-services outcomes below.
The multiple matters as much as services growthAnalyst FY2027 scenarios, October 8, 2026; growth/margin/multiple: 8%/66%/24x, 11%/67.5%/27x, 14%/68%/30x.
Risks
- Spending could weaken after refunds and football events; watch transaction growth and cross-border ecommerce through FY2027.
- Client rebates could swallow services gains; watch rebates outgrow gross revenue and adjusted costs outgrow net revenue.
- Routing restrictions or legal costs could worsen; watch court orders and cash generation, not just adjusted earnings.
What would change my mind
Two FY2027 quarters of revenue growth above 13% with an adjusted operating margin above 68% would make my restrained forecast too low.
