Notable Calls

Two firms are upgrading Visa (NYSE:V) today:

- Piper Jaffray upgrades V to Buy saying they believe this very high-quality franchise should be oninvestors' short list of stocks to own through this economic cycle. Firm is comfortable with Visa's earnings power through this cycle and over the long-term, despite financial/economic uncertainty in the markets and dollar strength; Visa's intrinsic value will continue to grow at a very attractive rate for many years to come.

Pullback in the share price, even with yesterday's recovery, has greatly improved the risk/reward, in our view, creating an attractive entry point for long-term investors; shares trading at 21x calendar '09 est. of $2.76.

Buffers against economic slowdown: debit (35% of pay. vol), non-U.S. & non-Europe pay. vol, new products, margin expansion on scale, op. leverage. Reducing fiscal '09/'10 EPS estimates from $2.77/$3.26 to $2.66/$3.22 on slower payments volume growth forecast.

Tgt is lowered to $72 from $81.

- Morgan Keegan upgrades V to Outperform noting the shares are down (36%) from highs on concern over economic sensitivity and technical selling pressures; Street 2009 op. EPS Consensus of $2.77 likely to be lower over coming weeks & technical factors could continue to weigh on stock.

They are modestly lowering 2008 & 2009 op. EPS to $2.19 (vs. $2.20 prev.) and $2.68 (vs. $2.76 prev.), factoring in softer global economic environment, currency headwinds, offset by positive pricing, and cost controls

Shares attractively valued at under 21x CY:09 op. EPS; Despite likelihood that US volumes have not yet bottomed & sequential card growth to remain negative in near-term – Morgan Keegan believes the long-term franchise value is highly attractive at current levels;

Notablecalls: Both are valuation calls. I see the stock hitting $62-63 today on these upgrades, if market holds up OK. Note that MoKe is upgrading MA as well on valuation basis.