Visa: Department of Justice to File Antitrust Suit

On Sept. 24, Bloomberg reported that the Department of Justice is set to announce an antitrust suit against Visa. The Department of Justice started an investigation in 2021, and the suit could be filed as early as today. The suit would appear to be centered on claims of anticompetitive behavior for debit card payments. In our view, given the wide-moat company’s market position, legal and regulatory risk is ever-present for Visa, and, while serious, this suit would not be the only material legal issue the company has outstanding. At this point, it is difficult to predict the exact consequence of this development, but we note that we have factored ongoing legal and regulatory costs into our valuation. We maintain our $272 fair value estimate and see shares as about fairly valued.