11:33 AM 1/17/2014 - StreetInsider
Deutsche Bank maintained a Buy rating on MasterCard (NYSE: MA) and raised its price target to $909.00 (from $756.00). Visa's (NYSE: V) target was raised to $268 (from $226). Analyst Bryan Keane the likely an appeal of Durbin will create a catalyst.
"The U.S. Court of Appeals for the D.C. circuit will kick off the Durbin appeal with oral arguments starting today and a decision likely coming in the April/May timeframe. Although difficult to predict, legal experts we have spoken to believe the most likely outcome is the appeals court either rejects Judge Leon s decision or grants a partial decision, allowing further cuts to debit interchange, but keeps routing rules unchanged," said Keane.
"Either of these two outcomes is likely to drive the multiple of Visa's shares higher and remove much of the uncertainty. If the appeals court rules in favor of Judge Leon's interpretation on routing, legal experts expect the Supreme Court to pick up the case since this would be a challenge to the Fed's authority, pushing out any final decisions until 2015/16. Accordingly, we expect the valuation discount for Visa compared to MA to close," he added.