Citi Boosts Mastercard, Square Price Targets

MA options traders are eyeing more upside, too

by Karee Venema

Published on Sep 10, 2019 at 9:57 AM
Updated on Jun 24, 2020 at 10:16 AM

Citigroup raised its Mastercard Inc (NYSE:MA) price target to $317 from $288 -- a nearly 12% premium to last night's close at $283.36, and above the average 12-month target price of $309.47. Broad-market headwinds are keeping a lid on MA stock in early trading today, though, with the shares last seen down 3% at $275.01.

Looking closer at the charts shows the credit card concern has been a long-term outperformer, up almost 50% year-to-date. More recently, MA stock has gained 8.3% since taking a sharp bounce off its 40-day moving average in early August, and hit a record high of $293.69 yesterday.

MA options traders are hoping for a quick bounce by week's end. The weekly 9/13 300-strike call has seen the biggest increase in open interest over the past 10 days, and data from the major options exchanges confirms buy-to-open activity here. In this case, call buyers expect Mastercard stock to surge above $300 by expiration at the close this Friday, Sept. 13.

Square Inc (NYSE:SQ) also saw its price target hiked at Citigroup, to $95 from $90. This new target represents expected upside of nearly 55% to Monday's close at $61.47, and sits in territory not seen since last October. Nevertheless, SQ stock is down 2.1% out of the gate at $60.16, extending a decline below its +10% year-to-date breakeven mark, which was breached in yesterday's trading.

Most analysts share Citi's upbeat outlook toward Square, which opens the door for bear notes, should the stock continue to slide. Currently, 16 of 31 covering brokerages maintain a "buy" or better rating, while the consensus 12-month price of $82.88 is a 38% premium to current trading levels.


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