What's Going On With Mastercard And Visa Shares Today

  • Mastercard Inc MA and Visa Inc V shares are trading lower on Tuesday as Mizuho flagged their declining U.S. personal consumption expenditure share.
  • Mizuho analyst Dan Dolev maintains Mastercard with a Buy, lowering the price target from $405 to $400.
  • Dolev's analysis suggests that Visa and MA's share of incremental U.S. personal consumption expenditures (PCE) continued to decline in 1Q 2023. 
  • Visa's share is now trending below its long-term averages, while MA is trending roughly in line. 
  • Although the rise of cross-border travel is an essential near-term positive catalyst, the share of incremental PCE is a crucial barometer of the long-term moat of businesses.
  • The analyst raised his MA 2023 revenue and EPS estimates to $25.3 billion and $12.28, up from $25.1 billion and $12.20. His 2024 revenue estimate moves up by ~$100 million, but EPS is now $14.53 vs. $14.93 previously, primarily due to lower adjusted operating income, as he was too aggressive in his prior model.
  • Dolev raised his V FY23 and FY24 revenue estimates to $32.4 billion and $35.9 billion, up from $32.0 billion and $35.5 billion, respectively. Similarly, he raised his FY23-24 EPS estimates to $8.56 and $9.69, up from the prior $8.40 and $9.65.
  • MA's price target reflects a slight premium to peer V as MA has less exposure to debit (which faces more medium-term challenges than credit) and less reliance on the U.S., where card penetration is much higher than in many international markets.
  • Price Actions: MA shares traded lower by 0.94% at $376.29 on the last check Tuesday. V shares traded lower by 2.21% at $227.38.
  • Photo via Wikimedia Commons
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