Shares of credit card giants Mastercard (MA) and Visa (V) were little changed in today’s trading as investors await their earnings results on January 30. Analysts are expecting earnings per share to come in at $3.69 on revenue of $7.38 billion for Mastercard. For Visa, Wall Street expects an EPS of $2.66 on revenue of $9.34 billion. This equates to 16.04% and 10.4% year-over-year increase in earnings, respectively. It’s worth noting that both companies have a long streak of beating earnings.
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And there are reasons to believe that this winning streak could continue. Recently, 4.5-star analyst Bryan Bergin from TD Cowen increased his price targets for Mastercard and Visa shares while maintaining his Buy ratings. Bergin believes that strong economic indicators will support steady payment activity in 2025.
Separately, Piper Sandler also increased its price target for both stocks while keeping its Buy ratings. According to the firm, the potential benefits of using advanced artificial intelligence in the payment industry are being underestimated. Indeed, by using AI, financial technology companies can improve their operations, which would lead to margin expansion and an increase in revenue growth.
What Do Options Traders Anticipate?
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. Indeed, the at-the-money straddle for MA suggests that options traders expect a 3.45% price move in either direction. This estimate is derived from the $550 strike price, with call options priced at $9.70 and put options at $9.25.
For Visa, options traders expect a 3.44% move based on calls and puts valued at $5.45 and $6.11, respectively, at the $337.50 strike price.
Which Stock Is Better, V or MA?
Turning to Wall Street, analysts think that MA stock has more room to run than V. In fact, MA’s price target of $592.25 per share implies almost 8% upside versus Visa’s 5.4%.
