These payments companies are well-positioned to take advantage of the current macroenvironment as valuations drop and inflation continues, Goldman Sachs stated. Will Nance, an analyst covering Visa and Mastercard, gave buy ratings to the cards. In a Tuesday evening note to clients, he stated that Visa and Mastercard will both benefit from the “electrification and consumption of consumers” and would be among the top defensive names in the market to weather inflation. He wrote that V/MA is the most positive because these businesses have low earnings. However, cross-border revenue trends are improving and are still in decline. This, along with higher inflation, should give an idiosyncratic boost to growth as well as a partial offset for any macro weaknesses. Nance believes both can be benefited from cross-border travel, e-commerce and “new flows and services” that go beyond consumer payments. Goldman estimates that Visa’s potential in areas such as business to business is $185 trillion. Nance stated that “between the two, they are incrementally more constructive in Visa and are adding it to the Conviction List as we believe V’s greater US exposure might insulate him from a choppier micro environment.” Nance gave price targets for Visa shares at $282 and Mastercard shares at $460, respectively. His Visa target suggests an upside of 38% starting Tuesday close. The Mastercard forecast, however is 35% higher than the stock’s closing price. Mastercard shares have declined 5.7% and 5.9% since the beginning, respectively. Fiserv was also covered by the bank, which gave it a Buy rating. — CNBC’s Michael Bloom contributed reporting
