U.S. Justice Department lawsuit sparks Visa (V.US) sell-off, Morgan Stanley says investors should buy

After the U.S. Department of Justice accused Visa(V.US) of monopolizing the debit-card market, Morgan Stanley published a research report, maintaining its "overweight" rating.

Visa's stock price fell more than 1% on Wednesday after falling 5.5% on Tuesday, following the U.S. Justice Department's lawsuit against the payment network giant for allegedly maintaining an illegal monopoly in the debit-card market. Morgan Stanley, however, believes the adjustment is "overreaction," and its analyst James Faucette said it "represents an attractive buying opportunity, as any financial impact to the company could be minimal."

Faucette noted that "historically, negative reactions to regulatory news have often been good buying opportunities."

The Justice Department's lawsuit alleged that Visa threatened merchants and banks with punitive interest rates if they shifted transactions to competitors, helping the company protect three-quarters of its debit-card transaction volume from fair competition. The Justice Department said Visa's actions cost American consumers and merchants billions of dollars.

Faucette expects the preliminary trial process to last for several years, and "the subsequent appeals could add another year or more to the entire legal process."