Visa Inc (V) and fintech firm Plaid said earlier this week that their $5.3 billion merger agreement would be terminated, after the US government filed a lawsuit to stop the proposed transaction due to antitrust concerns.
Visa shares closed higher for the fifth time in the past ten trading sessions in New York on Wednesday. The stock went up 0.23% ($0.49) to $209.35, after touching an intraday low at $208.78 and an intraday high at $210.90.
Shares of Visa Inc have retreated 4.29% so far in 2021 compared with a 1.43% gain for the benchmark index, S&P 500 (SPX).
In 2020, Visa Inc’s stock went up 16.41%, thus, it outperformed the S&P 500, which registered a 16.26% gain.
In November, the US Justice Department had filed a lawsuit to stop the deal, as it said Visa was “a monopolist in online debit transactions”, while the proposed acquisition “would eliminate a nascent competitive threat” to that monopoly.
The deal was proposed in January 2020. According to Al Kelly, Visa’s Chairman and Chief Executive Officer, it was scrapped so that a protracted litigation could be avoided.
“We are confident we would have prevailed in court as Plaid’s capabilities are complementary to Visa’s, not competitive,” the CEO also said.
Analyst stock price forecast and recommendation
According to CNN Money, the 35 analysts, offering 12-month forecasts regarding Visa Inc’s stock price, have a median target of $230.00, with a high estimate of $270.00 and a low estimate of $207.00. The median estimate represents a 9.86% upside compared to the closing price of $209.35 on January 13th.
The same media also reported that at least 30 out of 38 surveyed investment analysts had rated Visa Inc’s stock as “Buy”, while 5 – as “Hold”.