Mastercard Vs. Visa: Analyst Nods For Mastercard After Impressive Quarterly Performance

BMO Capital analyst Rufus Hone maintained Mastercard Inc MA with an Outperform and raised the price target from $480 to $490.

On Wednesday, Mastercard clocked net revenues of $6.55 billion, up 13% Y/Y, beating the consensus of $6.48 billion. Adjusted EPS rose 20% Y/Y to $3.18, above the consensus of $3.08.

Mastercard demonstrated another quarter of double-digit revenue growth, with payment network revenue benefiting from vital cross-border fees, while VAS growth accelerated quarter-on-quarter, the analyst said. 

Hone noted incrementally less downside risk to Mastercard’s FY24 guide relative to Visa Inc V, with MA highlighting tougher prior year comps in value-added services and from forex volatility for the slightly soft first quarter guide. Hone also reiterated his slight preference for a Mastercard over a Visa.

Raymond James analyst John Davis maintained Mastercard with an Outperform and raised the price target from $452 to $504. The re-rating followed solid fourth-quarter results. 

The analyst said that value-added services increased a healthy 17% and accelerated 300 bp (FX neutral), driving most of the revenue upside. However, the first-quarter revenue outlook for ~10% growth is ~200 bp ahead of Visa Inc V, and the FY24 guide for ~12% top-line growth is mainly in line with the Street. 

Davis expects EPS estimates to tick higher due to lower taxes and below-the-line items. 

He continues to recommend the stock with shares trading at a ~10% discount to the historical valuation premium (vs. S&P 500) despite durable double-digit revenue and mid-teens+ EPS growth.

Mizuho analyst Dan Dolev maintained Mastercard with a Buy and raised the price target from $462 to $480.

The fourth-quarter results were solid, and the analyst particularly liked Mastercard’s relative share gain vs. peer in ROW debit volumes. 

Dolev favored Mastercard over Visa, given a more attractive payment volume mix.

The analyst projects first-quarter revenue and EPS of $6.36 billion (prior $6.55 billion) and $3.13 (prior $3.20).

RBC Capital analyst Daniel Perlin maintained Mastercard with an Outperform and raised the price target from $432 to $499.

The fourth-quarter print and FY24 guide support the combination of a sustaining healthy consumer backdrop, value-added services revenue continuing to outpace payment volume growth, and reacceleration in the second half of 2024 revenue growth (vs. first half of 2024) given the first quarter’s tougher comps and lousy weather impacting the January start. 

The analyst projects first-quarter revenue and EPS of $6.34 billion (prior $6.4 billion) and $3.26 (prior $3.18).

Price Action: MA shares closed higher by 2.60% at $460.92 on Thursday.

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