BMO Capital analyst Rufus Hone reiterated a Buy rating on Mastercard (MA – Research Report) yesterday and set a price target of $490.00.
Rufus Hone has given his Buy rating due to a combination of factors that mitigate the potential risks from the COF and DFS deal to Mastercard’s long-term prospects. His analysis indicates that the financial impact on Mastercard from the COF volume shift will be minimal, less than 1% in terms of EPS. This perspective considers that although Capital One intends to migrate a significant volume of transactions away from Visa and Mastercard to Discover’s network by 2027, this process is gradual and represents a relatively small proportion of the total payment volume processed by Mastercard. Furthermore, Hone implies that the resilience of Mastercard’s value-added services revenue could lessen any potential negative effects.
Additionally, Hone emphasizes the strength of Mastercard’s long-term growth potential, undeterred by the deal. He suggests that the market may not fully appreciate the durability of Mastercard’s revenue and EBIT growth, as well as its robustness against regulatory pressures and the emergence of alternative payment methods. Mastercard’s position within the payments industry is seen as secure, with the COF and DFS deal having a negligible impact on its international operations and competitive intensity domestically. Thus, he views Mastercard as an essential holding with sustained growth prospects, which justifies the Outperform rating.
According to TipRanks, Hone is a 4-star analyst with an average return of 8.2% and a 65.00% success rate. Hone covers the Financial sector, focusing on stocks such as Mastercard, Western Union, and Paypal Holdings.
In another report released yesterday, DBS also maintained a Buy rating on the stock with a $520.00 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.
Read More on MA:
- Morgan Stanley sees small MasterCard EPS impact from Discover-Capital One deal
- Discover buyout negative headline for Visa, MasterCard, says JPMorgan
- Capital One plans to buy Discover in all-stock deal, WSJ reports
- Seaport financial services analyst to hold analyst/industry conference call
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