UPDATE: Sterne Agee Downgrades MasterCard to Neutral on Fair Valuation, Lack of Momentum

In a report published Friday, Sterne Agee analyst Greg Smith downgraded the rating on MasterCard

from Buy to Neutral. In the report, Smith noted, “We are downgrading MA shares to Neutral from Buy based on: 1) the valuation, which we now view as fair (21x 2013 EPS) and in line with where we expected the stock price to reach, and 2) a general lack of positive momentum in the business. On the margin, we believe that some relative momentum has shifted to Visa and MasterCard faces tougher comps over the next few quarters as it grows over prior debit wins. In addition, we do not see any substantial upside to consensus EPS expectations.” MasterCard closed on Thursday at $541.24.