In a report released yesterday, Manyi Lu from DBS maintained a Buy rating on Mastercard (MA – Research Report), with a price target of $520.00.
Manyi Lu has given his Buy rating due to a combination of factors highlighting Mastercard’s potential to capitalize on the increasing shift towards digital payments and its strong position in a lucrative market with room for significant growth. Mastercard’s revenue streams, encompassing transaction processing and cross-border volume fees, are well-positioned to benefit from the ongoing global migration from cash to electronic payments, driven by rising e-commerce penetration and consumer spending. Additionally, the company’s substantial exposure to international payment volumes, particularly as global travel recovers, is expected to contribute to its growth, with consensus estimates predicting a significant increase in cross-border volume fees in the coming years.
Further underpinning the Buy rating is Mastercard’s impressive net margin, which exceeds 50% due to its competitive moat in a largely oligopolistic industry. The company enjoys powerful network effects from serving a vast number of merchants and cardholders, creating high barriers to entry for new challengers. This strength is reflected in the upward revision of the target price to $520, which incorporates a valuation premium over its peers, justified by Mastercard’s higher earnings growth potential. Long-term secular trends, such as the ongoing shift from cash to electronic payments, are also expected to be key drivers of Mastercard’s performance, reinforcing the favorable outlook for the stock.
According to TipRanks, Lu is a 2-star analyst with an average return of -2.1% and a 66.67% success rate. Lu covers the Financial sector, focusing on stocks such as Mastercard, Visa, and Qifu Technology.
In another report released on February 20, Morgan Stanley also maintained a Buy rating on the stock with a $536.00 price target.
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Mastercard (MA) Company Description:
Mastercard, Inc. operates as a technology company. The firm engages in the payments industry that connects consumers, financial institutions, merchants, governments and business. It offers payment solutions for the development and implementation of credit, debit, prepaid, commercial and payment programs. The company was founded in 1966 and is headquartered in Purchase, NY.
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