03:46 PM EDT, 09/25/2024 (MT Newswires) -- Visa's (V) results are unlikely to be affected for "a number of years" from any potential injunctive relief sought by the US Department of Justice, given the anticipated long duration of the overall litigation process, UBS Securities said Wednesday.

On Tuesday, the Justice Department filed a civil antitrust lawsuit against the payments giants for alleged monopolization and other unlawful conduct in debit network markets. The complaint -- filed in the US District Court for the Southern District of New York -- alleges, among other things, that more than 60% of debit transactions in the US run on Visa's network, allowing the company to charge more than $7 billion in annual processing fees.

"We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market," Attorney General Merrick Garland said in a statement. "Visa's unlawful conduct affects not just the price of one thing -- but the price of nearly everything."

The DOJ's suit is "meritless," Visa's general counsel, Julie Rottenberg, said in a statement e-mailed to MT Newswires on Tuesday. "Today's lawsuit ignores the reality that Visa is just one of many competitors in a debit space that is growing, with entrants who are thriving," she said. "We will defend ourselves vigorously."

Visa's shares were down 1.1% in Wednesday late-afternoon trade following a 5.5% drop in the previous session.

Tuesday's share-price decrease likely implies "a meaningful direct impact via a degree of share loss and/or pricing pressure in the US debit market, alongside additional indirect impacts related to concerns around broader business practices across the franchise," UBS analysts, including Timothy Chiodo, said in a Wednesday note to clients.

There's a possibility that the US debit net revenue mix mentioned in the DOJ's complaint may be including factors that would likely not be affected by any potential injunctive relief sought by the department, according to the note.

The DOJ requested that the court prohibit Visa from, among other things, bundling credit services or incentives with debit services and imposing incentive structures that discourage or eliminate competition, a court filing showed.

UBS said the DOJ doesn't impose fines, and will seek injunctive relief on the process side only. "We believe any potential injunctive relief is unlikely to impact Visa's reported results for a number of years given the motion, discovery, and appeal process likely associated with a case of this stature," the analysts said. There's a possibility that the parties may reach a settlement during the process, according to the note.

The firm said any impact to the company's earnings before interest and tax margins and ultimately per-share earnings is likely to be "slightly higher" than the impacts to net revenue. "This could be a lengthy process if there is no settlement reached," the analysts wrote.

Price: 269.92, Change: -2.86, Percent Change: -1.05