Analysts Heap More Bull Notes on Visa, MasterCard Stocks Before Earnings

Analysts and options traders are extremely bullish on V and MA shares

Jan 29, 2018 at 10:41 AM
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Visa Inc (NYSE:V) and MasterCard Inc (NYSE:MA) are both scheduled to report earnings on Thursday, the former after the market closes, the latter before the open. The stocks have benefited greatly from the broad-market rally, sporting year-over-year gains of 50% and 55%, respectively, while both are trading in record-high territory. As such, Wall Street is extremely bullish on V and MA ahead of earnings, evidenced by a fresh round of analyst attention this morning.

Specifically, brokerage firm Instinet raised its respective price targets on Visa and MasterCard to $148 and $195, saying it sees tailwinds for both thanks to tax reform -- echoing a Susquehanna note from December. Speaking of which, that firm also weighed in on V shares, trimming its price target to $146 from $148. Rounding out this morning's analyst action, Citigroup upped its price target on MA to $194 and its mark for Visa to $145.

Analysts are already overwhelmingly bullish on both names. For instance, 25 brokerages are covering MA, and just three have anything less than a "buy" rating on the stock. It's a similar setup for V, with just one of 26 covering analysts maintaining a rating below "buy."

This bullish sentiment is seen from options traders, too. In fact, both securities have seen call buying more than double put buying over the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).

Despite tapping a fresh record high of $126.88 out of the gate, Visa shares were last seen 0.5% lower at $125.71, while MasterCard is trading down 0.1% at $170.19 after also tapping an all-time best of $170.81 earlier. However, a brief pullback may not be surprising, since both credit card stocks saw their 14-day Relative Strength Indexes (RSI) close above 80 last Friday -- showing they were well into overbought territory.

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