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KBW: MasterCard-Citigroup Deal Will Give A 'Decent Tailwind'


Keefe, Bruyette & Woods commented on Mastercard Inc (NYSE: MA) Wednesday and maintained an Outperform rating and $109 price target.

Analysts, led by Sanjay Sakhrani, discussed the deal between MasterCard and Citigroup Inc (NYSE: C), in which the two companies expanded a "10-year global agreement in which Citi will begin to shift its consumer proprietary credit card and debit portfolios to MasterCard in 2015."

Other networks would be involved in the consumer co-brand and commercial cards, according to the analyst's note.

Sakhrani assumed that approximately 2 to 3 percent of Visa Inc (NYSE: V)'s global payments volume is related to Citi, and if half were to shift over to MasterCard, it would be 1-2 percent accretive to 2016 EPS.

Sakhrani believed this new agreement was "a positive for MasterCard as it locks up one of its largest issuing partners and appears to provide a decent tailwind for EPS growth."

The analysts added that the deal would help "solidify its positioning with a key partner, particularly in the wake of shifting issuing dynamics on the network side and shake ups occurring in the co-brand space."

Mastercard Inc recently traded at $91.71, up 0.81 percent.

Latest Ratings for MA

Dec 2019MaintainsBuy
Dec 2019Initiates Coverage OnBuy
Nov 2019MaintainsOverweight

View More Analyst Ratings for MA
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Posted-In: Keefe Bruyette & Woods Sanjay SakhraniAnalyst Color Analyst Ratings


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