Deutsche Bank's Payment Processors Update (MA, V)

Deutsche Bank is out with its "Payment Processors" update and comments on Visa V and Mastercard MA prior to both companies reporting earnings next week. In a note to clients, Deutsche Bank writes, "V reports fiscal 1Q11 results on Wed 2/2, after market. For FY1Q11, we see revs of $2.2bn (+13% Y/Y, +40bps from FX), EBITDA $1.4bn (65.3% margin, flat Y/Y), and EPS of $1.18 (+15% Y/Y). We are $0.02 below Street and our estimates are based on Sep Q vols (lagged) of +16% (June Q +17%), and trans. +12.5% in Dec Q (Sep Q +16%). MA reports 4Q10 results on Thurs 2/3, before market. For 4Q10, we see revs of $1.3bn (+4% YoY, -270bps from FX), EBITDA $623m (46.2% margin, +720bps), and EPS $3.07 (+37% YoY). We are $0.03 above Street and base our estimates on +5% GDV growth YoY (last Q +8%), +4% trans (+1% last Q), and cross-border vols +16.5% (last Q +15%)." Deutsche Bank maintains Buy on V and MA. Shares of V are trading pre-market at $70.61, up 0.01% from yesterday's close. Shares of MA are trading pre-market at $238.75, down 0.15% from yesterday's close.