BofA Upgrades Mastercard On 'Potentially Priceless Opportunity'

Mastercard Inc MA stock has traded almost flat over the past four months and doesn't sufficiently reflect the opportunity ahead of a potential reacceleration of positive trends, according to BofA Securities.

The Mastercard Analyst: Jason Kupferberg upgraded Mastercard's stock from Neutral to Buy, while raising the price target from $358 to $400.

The Mastercard Thesis: Coronavirus vaccine distribution is expected to expand significantly through the first half of 2021, which is likely to trigger a “reacceleration in economic growth, consumer spending and mobility/travel this year,” Kupferberg said.

“We believe that there is pent-up demand for both domestic and cross-border leisure travel, which could start being released as soon as 2Q21, assuming vaccines become more broadly distributed,” the analyst wrote in a note. “The pandemic has also hastened the long-term/secular displacement of cash in favor of electronic payments."

Even if Mastercard misses expectations for the fourth quarter of 2020, due to consumer spending being hit by the second wave of COVID-19, its stock is unlikely to get penalized, “as investors are rightfully much more focused on the trajectory of improvement in the business in 2021/22,” Kupferberg added.

MA Price Action: Shares of Mastercard was trading almost flat at $347.42 at the time of publication Wednesday.