🤖📈 Top Trade Ideas for July 13

Visa is expected to experience mid-teens EPS growth, propelled by the growth in electronic payments, new payment flows, and value-add services. With the current shares at $236.45 ($242 as of this email), the forecasts project a 92% total return (23% annualized) by September 2026. This return is mainly driven by a ~14% EPS CAGR, an upward P/E re-rating, and a 0.8% dividend yield. U.S. Payments Volume has shown stable growth trends and consumer confidence remains high. Visa's recent acquisition of Pismo for $1 billion is part of its growth strategy. Potential risks include governmental intervention and increased competition, particularly from India's Unified Payment Initiative. Visa's Q3 FY23 results are anticipated to bring few surprises due to disclosed volume data for two of the three months and the predictability of Service revenues each quarter.

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Braze offers a gateway to connect with customers at scale through its omnichannel customer engagement platform. Plain-spoken, you use Braze to communicate with your customers. With Braze, you can segment, engage, analyze and personalize communications with your customers across channels incl. email, messaging, in-app, push notifications, social, WhatsApp and everything in between. In a world where start-ups channel VC funds to Google and Facebook on low RoI new customer acquisitions, Braze offers a compelling inward-looking alternative to engage with existing customers who are sticky, loyal and have a far higher RoI to boot. Braze is a much superior business contrary to a fatigued investor’s perception of operating in a crowded Martech landscape with ~10,000 start-ups. It offers a play on the growth of e-commerce and consumer and is trading at 9x ARR (30-Jun-23) having traded at 5x ARR at its lows.

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The investment case for Bank of America (BAC) is based on an average Return on Tangible Common Equity (ROTCE) of 15% across the cycle, improvement in the Cost/Income ratio, and a P/E multiple re-rating to 13.5x. With shares currently priced at $28.53 ($29.49 as of this email), forecasts indicate a 106% total return by 2025, largely driven by a re-rating from the current 9.0x P/E. This also includes contributions from EPS growth and a 3.4% Dividend Yield. Despite the cyclical nature of bank earnings, BAC's share price peaked at over $49 in January 2022. The stability of the U.S. banking system, as evidenced by major banks passing the Fed’s annual stress tests and BAC's recent dividend increase, is also positive. Q2 2023 results are expected to be strong but weaker than prior quarters. BAC is considered a long-term "value" investment with few near-term positive catalysts and some potential negatives, including the possibility of a U.S. recession. However, a good return is expected over time based on the low entry price.

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