BofA Picks Visa Over Mastercard, Raises Price Targets
MA) have gained 15.9%, more than double the 7.6% gain by competitor Visa Inc (NYSE: V) in that time.
On Thursday, one Wall Street analyst said Mastercard’s recent outperformance underscores the fact that Visa is the better investment at this point.
Jason Kupferberg reiterated his Buy rating for Visa and raised his price target from $227 to $234. He also reiterated his Hold rating for Mastercard and raised his price target from $324 to $358.” data-reactid=”21″>The Analyst: Bank of America analyst Jason Kupferberg reiterated his Buy rating for Visa and raised his price target from $227 to $234. He also reiterated his Hold rating for Mastercard and raised his price target from $324 to $358.
After adjusting for the timing impacts, Kupferberg said Mastercard’s quarter was essentially in-line with Visa’s.
Looking ahead to the second half of the year, Kupferberg said Visa is better-positioned to potentially report some meaningful earnings beats, and the stock also has more valuation upside given it currently trades at a 12% earnings multiple discount to Mastercard.
Mastercard bulls may argue that the company’s 13.5% US debit volume growth compares favorably to Visa’s, at 8%, but Kupferberg said those numbers are a bit misleading given Mastercard’s debit volume is only half the size of Visa’s.
“Given current choppiness in consumer spending, we believe the higher mix of debit (which tends to be linked to more non-discretionary purchases) is a plus,” Kupferberg said.
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