By Mackenzie Tatananni

Visa stock has lagged behind the market this year, but analysts believe one factor behind that isn't as bad as it's made out to be. In fact, the same weakness could become a strength for the payments company.

In a research note Thursday, BofA Securities analysts led by Mihir Bhatia upgraded shares of the card network to Buy from Neutral with a target of $382 for the price. Visa, in their eyes, is "a great business on sale."

Shares were 4.9% higher at $341.69, on pace for their largest same-day percentage increase since April. The price target suggests the stock could rise nearly 12%.

Visa has risen 8.1% in 2025, lagging behind a 17% gain for the S&P 500 and not far ahead of a 6% gain for its primary peer, Mastercard. The divergence from American Express, which has surged 29%, could speak to a widening gap between income groups, considering AmEx's exposure to more affluent customers.

But the BofA team sees ways for Visa to get ahead. It sees the rise of stablecoins as "an attractive opportunity, not a threat."

Analysts posited that regulatory developments related to stablecoins, a type of cryptocurrency pegged to a fiat currency such as the U.S. dollar, kicked off the most recent leg of Visa's underperformance relative to the market. Shares began to slide on June 11 after the Genius Act, a bill to regulate U.S. stablecoin issuers, passed its first major vote in the Senate.

BofA believes that may have been an overreaction. "We are skeptical that consumers will shift away from card-based payments to stablecoins en masse given rewards, habits, and ease of use of the current model," the analysts wrote.

Stablecoins are presently viewed a store of value rather than a mode of payment, so there aren't many ways to use them. BofA said that in the near term, applications likely will center on cross-border business-to-business payments.

In any case, Visa hasn't remained on the sidelines. Mizuho Securities analyst Dan Dolev said in a late September research note that the company could be "one of the biggest stablecoin winners."

The payments company is "already active in stablecoins, enabling of $140 billion in crypto transactions, positioning it to benefit if adoption grows," BofA analysts wrote on Thursday. Mastercard has made similar moves.

The uncertainty over stablecoins and the effects of a $38 billion antitrust settlement with merchants have shaken up stocks in the sector. However, "we believe these risks are manageable and should not detract from Visa's fundamentals," the analysts said.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

December 11, 2025 13:55 ET (18:55 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.