by winston » Fri Nov 15, 2019 1:10 pm
not vested
Mastercard (MA)
Payment processing giant Mastercard has a huge market cap of $281 billion and has swiped its way into the public’s conscience via its ubiquitous presence in our everyday life.
Even so, it is not one to rest on its laurels, and has many income streams.
The company is developing its ACH (Automated Clearing House) infrastructure, winning new market share (it is in the process of adding Santander in the UK, BNP Paribas, and BMW portfolio, amongst others) and working with fintech disruptors such as Revolut, N26, and Monzo.
5-star Deutsche analyst Bryan Keane thinks the multinational firm has an “operating model that delivers,” noting, “MA is dedicated to expanding its card business while also layering on incremental network growth over the mid to long-term through new opportunities such as ACH/real-time payments, B2B, cross-border account-to-account and new applications like bill pay.”
The Bill Pay Exchange is set to launch in the US in 4Q19 and represents a big investment for Mastercard. The service will allow consumers to pay bills without having to remember multiple passwords, set up accounts with different billers, and log into multiple websites. Mastercard believes it can become a key player in the bill presentment and payer market.
Keane added, “Overall, we believe MA can continue to grow solid low-double-digits top-line (propelling into mid-teens growth) and deliver operating leverage even while investing in future network expansion initiatives, which should drive EPS growth above the high-teens, in our view.”
To this end, Keane reiterated a Buy rating on MA, with a price target of $320, which provides potential upside of 15% from its current price of $277.
All in all, over the last three months, MA stock has received a whopping 18 Buy ratings. As a result, the stock has a ‘Strong Buy’ analyst consensus rating.
These analysts believe (on average) that the financial services giant has big upside potential of over 13% from the current share price. This would take MA from $278.34 all the way to $316.13.
Source: DB
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