Wall Street Bulls Look Optimistic About Visa (V): Should You Buy?

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?

Let's take a look at what these Wall Street heavyweights have to say about Visa (V) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

Visa currently has an average brokerage recommendation (ABR) of 1.32, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 22 brokerage firms. An ABR of 1.32 approximates between Strong Buy and Buy.

Of the 22 recommendations that derive the current ABR, 17 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 77.3% and 13.6% of all recommendations.

Brokerage Recommendation Trends for V

Check price target & stock forecast for Visa here>>>

The ABR suggests buying Visa, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.