Visa Inc. shares fell sharply Wednesday after Bank of America Corp.'s James Kissane became the first analyst to recommend avoiding the shares.
"We are among the only skeptics on the networks," Kissane said Wednesday in a note to clients as he cut the shares from "neutral" to "underperform." This is typically interpreted as a sell recommendation, the only one among the 38 analysts surveyed by Bloomberg. "The pricing power of the networks is likely to be considerably diminished," he wrote.
Visa and its rival MasterCard Inc. came under pressure this year as U.S. lawmakers capped debit card interchange fees. Emerging technologies, including mobile payments, also may threaten their business models, Kissane said.
He predicted that Visa shares will trade at $70 in a year.
At midmorning, the shares were trading at $69.20, down 3.2% from Tuesday. The stock price of the San Francisco company had declined 18% this year through Tuesday.