Mastercard's ePayment Growth and B2B Potential: Why One Analyst Raised Their Forecast

Truist Securities analyst Andrew Jeffrey maintained Mastercard Inc MA with a Buy and raised the price target from $450 to $475.

 At a basic level, Mastercard is a branded global card switch, driving organic revenue growth and scale via share gains in a growing market. Jeffrey is bullish on structural ePayment growth, even as card penetration rises, reflecting a view that growing complexity e.g. eCommerce, tokenization, contactless, new tenders, like BNPL, and multi-tx environments, such as on-demand delivery, fuel volume growth. 

In addition to his outlook for 10%+/- global card volume growth, the analyst is encouraged by share gains, evidenced by recent wins, including UniCredit (private), Citizen's, and Deutsche Bank. 

Mastercard has Commercial momentum, Jeffrey writes. Commercial cards are a precursor to faster B2B volume and revenue growth as the company rolls out straight-through processing and ERP integrations. 

The analyst encourages investors to recognize that global B2B volume is several times larger than B2C and see the company driving significant B2B volume and revenue over the next several years. 

The share gains reflect a strategy of leading with solutions that lift issuers' revenue growth rather than simply focusing on cards. 

Mastercard also takes wallet share at merchant customers by converting card portfolios with loyalty solutions, like Dynamic Yield, distinct from Visa Inc V, supported by broader tech and digital offerings. 

Jeffrey is also constructive on Mastercard's VAS portfolio. Mastercard's VAS are distinct, focusing on Fraud, Intelligence, and Data. 

By contrast, Visa concentrates more on Gateway and Processing. Although not necessarily superior, the analyst contends that Mastercard's VAS allows it to deepen merchant and acquirer penetration and could support sales to non-Mastercard customers. 

The Networks have long been in legislative cross-hairs, even as he thinks efforts to alter the industry model are misguided and suffer from the law of unintended consequences. 

He views pending Credit Card Competition Act (CCCA) legislation no differently, and the seemingly unworkable credit routing rules it proposes would be costly to issuers and confounding and deleterious to consumers.

Jeffrey's CY24E revenue and EPS are above the Street at $28.7 billion and $14.62 (Street $28.6 billion and $14.54). The CY25E revenue and EPS are $32.5 billion and $17.39 (Street $32.3 billion and $17.21).

Price Action: MA shares closed higher by 0.07% at $402.49 on Monday.