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Jefferies Prefers MasterCard Over Visa Heading Into Q4 Results

Jefferies Prefers MasterCard Over Visa Heading Into Q4 Results

Jefferies recently issued a report on the technology and credit card industry, highlighting Visa Inc (NYSE: V) and Mastercard Inc (NYSE: MA) ahead of the two companies' Q4 earnings results. Currently, Jefferies rates Visa and Mastercard with a Buy rating while price targets are unavailable.

Jason Kupferberg, Ramsey El-Assal and Ryan Cary, analysts and associates at Jefferies, wrote, "We are below consensus for V and MA for 4Q and 2016, as we believe the Street has not properly modeled impacts of FX/macro and opex, especially for MA. That said, we believe underlying fundamentals remain generally healthy for the networks, and we continue to emphasize these stocks should be a relatively calm port in stormy equity markets. Reiterate Buy."


Heading into 4Q earnings Jefferies believes that Wall Street's expected revenue growth of 6.3 percent for the company may be aggressive. However, Mastercard does have a modest discount valuation and may experience multiple headwinds in 2016 including higher rebate expense, low gas price and Chase deconversion. Going forward in 2016 Jefferies and other analysts will be closely monitoring the Chinese market and its effect on Mastercard's warnings and investment activity, particularly the expansion of their digital platform.

Related Link: Visa Gives Blockchain A Nod In End-Of-Year Summary


Jefferies noted that Visa has had multiple portfolio wins including their USAA and Costco Wholesale Corporation (NASDAQ: COST) accounts. Furthermore, Visa is expected to return to an aggressive share repurchase program, which makes the company a possibly attractive investment in 2016.

At The Time Of This Publication...

Mastercard was seen trading at $87.91, up 2.08 percent.

Visa was seen trading at 72.68, up 1.57 percent.

Costco was seen trading at 152.82, up 1.62 percent.

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Latest Ratings for V

Jan 2020MaintainsOverweight
Jan 2020MaintainsOutperform
Jan 2020MaintainsBuy

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