Market Overview

Sterne Agee CRT On Payment Stocks: 5 Big Names Initiated At Buy

Sterne Agee CRT On Payment Stocks: 5 Big Names Initiated At Buy
  • Moshe Katri of Sterne Agee CRT initiated coverage of various payment stock companies, mostly with bullish ratings.
  • The analyst initiated Visa Inc (NYSE: V), Mastercard Inc (NYSE: MA), Global Payments Inc (NYSE: GPN), First Data Corp (NYSE: FDC) and Fiserv Inc (NASDAQ: FISV) with Buy ratings.
  • Concurrently, Cognizant Technology Solutions Corp (NASDAQ: CTSH) was initiated with a Neutral rating.

Moshe Katri of Sterne Agee CRT initiated coverage of a handful of payment stock companies on Thursday, mostly with bullish ratings.

Here is a highlight of the notable calls.


Katri initiated coverage of Visa with a Buy rating and $94 price target, reflecting the company's "attractive" business model, growth prospects and the potential for increasing shareholder returns.

Katri added that Visa could benefit from several growth and scale catalysts, including: 1) increased "dominance" in the payments ecosystem (such as Apple Pay), 2) incremental value services that could be offered to merchants, 3) earlier-than-expected contributions and realized synergies from Visa Europe.

Related Link: Credit Suisse Is Bullish On Payment Processors, Notes "People Will Not Stop Buying Things"


Katri initiated coverage of MasterCard with a Buy rating and $110 price target. The premise of the analyst's bullish rating is his belief that Visa's combination with Visa Europe will likely have "little impact" on MasterCard's European operations.

Katri also cited several upcoming catalysts including further growth in the payments ecosystem, incremental opportunities from European regulations, and a longer-term opportunity in China.

Global Payments

Katri initiated coverage of Global Payments with a Buy rating and $85 price target, which reflects the possibility of top line and margin expansion opportunities.

The analyst suggested that the company's "dramatic" changes to its business model makes it "well-positioned" to post a high single-digit (organic) revenue growth profile and mid-double-digit CEPS growth over the next few years.

First Data

Katri initiated coverage of First Data with a Buy rating and $22 price target, pointing to an "attractive" valuation relative to the company's prospective growth rates and profitability.

The analyst expects the company to post 5 to 6 percent top-line growth and 5 to 10 percent in CEPS growth over the next few years, culminating in $1 billion-plus (up roughly 3x from prior levels) in free cash flow.


Katri initiated coverage of Fiserv with a Buy rating and $115 price target as the company is "well-positioned" to accelerate its top-line growth, improve its margins and generate "strong" free cash flows, while also returning cash to shareholders in the form of stock buybacks.

The analyst also highlighted the company's role as a "strategic partner" to large and small community banks.

Cognizant Technology

Finally, Katri initiated coverage of Cognizant Technology with a Neutral rating and $70 price target as recent concerns over M&A activity in the health care plan provider space (representing 15 percent-plus of revenue) could impact the company's top-line growth throughout 2016.

As such, the analyst is projecting Cognizant's revenue and CEPS to moderate from 2015's levels to the low-teens.

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Posted-In: Moshe KatriAnalyst Color Long Ideas Price Target Initiation Top Stories Analyst Ratings Trading Ideas Best of Benzinga


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