11:32 AM EDT, 07/24/2024 (MT Newswires) -- Visa's (V) US spend growth slowed in Q2 but overall trends remain stable from the previous quarter when excluding leap year impacts, Morgan Stanley said in a note Wednesday.

The firm said that July trends remain slow due to Hurricane Beryl, global technology outage and delayed Amazon Prime promotions, however, growth in August and September "will show acceleration back toward 5%."

Morgan Stanley said it remains cautious about consumer trends and the divergence in credit versus debit spending, as Visa's management noted slower growth in low-spend consumers and reduced total payment volume growth to 7% due to slower spending in Asia-Pacific and Europe.

The current strength in value-added services and new flows revenue will help improve investor skepticism about the durability of the company's revenue growth speed, according to the note.

"Investors should look favorably on the relative stability of earnings per share growth, helped by a significant contribution from faster cross-border, value-added services and new flows, even when taking into account expectations for slower volume growth," the firm added.

Morgan Stanley reduced the price target on Visa's stock to $322 from $326 and reiterated its overweight rating.

Visa shares fell over 4% in recent trading.

Price: 253.75, Change: -11.05, Percent Change: -4.17