Visa's Stock Surges To Pace Dow Gainers After Upbeat Analyst Comments

Visa Inc.'s stock surged 3.7% in midday trade Tuesday, reversing the previous session's selloff, after Bank of America Merrill Lynch said the credit card company's deal to buy its European counterpart was more favorable than anticipated. The stock paced the gainers within the Dow Jones Industrial Average . BofA Merrill analyst Kenneth Bruce reiterated his buy rating on the stock, but raised his price target to $85 from $78. While the purchase price for Visa Europe was higher than expected, "the structure of the transactions and potential share repurchases are also more favorable, in our view, leaving the EPS accretion from the transaction largely as forecast in the low to high single digits, all things considered" Bruce wrote in a note to clients. "We like the strategic benefits from the combination and think that it will drive significant value, though there are several moving pieces and executions issues to come." The stock had lost 3% on Monday after Visa announced the deal, and after it reported fiscal fourth-quarter earnings that missed expectations.

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