Wedbush's Moshe Katri maintained an Outperform on Visa with a price target lifted from $150 to $162.
The analyst maintained an Outperform on Mastercard with a price target lifted from $220 to $235.
Visa: Plenty Of Catalysts Ahead
Visa reported a top-and-bottom-line beat in its fiscal first quarter, along with 11-percent growth in processed transactions and 7-percent growth in cross-border transactions, Katri said in a Thursday note.
Looking forward to full fiscal 2019, Visa guided to the following, the analyst said:
- Low double-digit net revenue growth.
- Client incentives as a percentage of revenue of 22-23 percent.
- Mid-to-high single-digit operating expense growth.
- A tax rate of 20-20.5 percent.
- 100 basis points in foreign exchange drag on the second quarter and a 250-basis point swing for the full year
Visa has multiple growth and scale catalysts as it exits its first-quarter report, including the rise of electronic payments at the expense of cash and checks; favorable European regulations; volume growth from mobile payments; and ACH-based revenue growth opportunities, according to Wedbush.
Mastercard: Attractive Business
Mastercard similarly reported a top-and-bottom-line beat in a fourth-quarter print highlighted by 15-percent year-over-year revenue growth, 15-percent incentive growth, 15-percent growth in domestic assessments and 13-percent growth in cross-border volume fees, Katri said in a Thursday note.
The credit card network favorably guided its 2019 outlook to include low-teens net revenue growth and cross-border volume growth in the mid-teens, the analyst said. The first-quarter guidance is shy of the full-year outlook due to a difficult comp in 2018 and foreign exchange headwinds, he said.
The company continues to offer investors an "attractive business model" with strong shareholder returns, Katri said.
Similar to rival Visa, Mastercard should be able to post a 10-15-percent revenue growth rate and a 20-percent EPS growth rate in the coming years, in Wedbush's view.
Visa shares were set to close Thursday's session up 1.16 percent, while Mastercard was traing 0.51-percent higher.
Latest Ratings for MA
|Jan 2019||Jefferies||Initiates Coverage On||Buy|
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