Deutsche Bank (DB) analyst Bryan Keane lifted his price target on Mastercard Inc. (NYSE:MA) to $465 from $415, while reiterating its "Buy" rating on the stock due to the momentum in the business model.
"Yesterday, we met with MA's CEO, CFO, and US President to get a better read on the network model. We believe global transaction growth remains solid, spurred by adoption of electronic payments and market share gains," Keane wrote in a note.
Taking advantage of the Durbin changes, Keane said channel checks show that MA is winning a material amount of new PIN debit volume which brings low rev yields but solid margins.
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Last week, V sent out a bulletin highlighting its specific US pricing changes with a higher network participation fee and a lower variable component, Keane noted.
Keane said MA has not fully studied the pricing change, but seemed puzzled that signature debit fees were lower while fees for PIN debit remained the same. MA does not feel like it needs to rush to make any adjustments in price, but certainly will if necessary.
Additionally, MA believes V's plan to run PIN debit transactions through VisaNet would infuriate banks and will not likely happen with any frequency, Keane wrote.
MA stock, which has been trading in the 52-week range between $240.36 and $418.76, is up 2% to $414.31 on Friday.