美股-金融行业-Visa卡与万事达卡深度研究

Visa & Mastercard Deep Dive Expanding Moats of the Four-Party Model Specialty Finance | Comment Best businesses in Payments: While both Visa and Mastercard currently trade at the high end of their average NTM P/E ranges and relative to their average premiums vs. the S&P 500, we believe the networks are among the best businesses in Payments and expect both to continue compounding at low- to mid-teens revenue and mid- to high-teens EPS growth over the medium to longer term. Our confidence is bolstered by both networks’ TAM expansion beyond their core consumer-to-business retail payments, particularly push-to-card (e.g., Visa Direct, Mastercard Send), B2B payments, and bill-pay. Slight preference for Visa: Although we rate both stocks Outperform, we maintain a slight preference for Visa given a combination of relative valuation support (Visa currently trades at ~2x its three-year average discount to Mastercard on an NTM P/E basis), paired with our expectation for Visa to close the organic ex-FX revenue growth gap in CY 2021 driven by (1) the lapping of this year’s (FY 2020) step-up in incentives (~50% of volumes renewed within the 2 years period ending 1H2020 – unprecedented renewal activity); (2) stabilization of share in Europe after ~900 bps of losses from 2014 to 2018, along with net yield benefits from both pricing and value-added service sales enabled by the migration to the global VisaNet platform (e.g., fraud, authorization, risk tools); and (3) expectations for outsized benefits (relative to Mastercard) from the nascent US contactless rollout given its greater US mix. Networks Deep Dive: We believe that the majority of drivers for the two companies are secular and shared in-nature, and there are nuances even within the shared factors (related to mix, legacy strengths, and strategy). We provide a detailed overview of the most important growth drivers for Visa and Mastercard including: 1) regional mix (MA ~65% outside the US vs. ~55% for Visa); 2) cross border (benefiting from eCommerce mix-shift); 3) contactless (outsized benefit to Visa given greater US mix and pending rollout); 4) B2B (increased emphasis on penetrating $125tr TAM – e.g., Mastercard Track, Visa’s Business Payments Network, Visa’s B2B Connect); 5) Push-to-Card (beyond PCE TAM expansion); 6) Services (MA at ~26% of revenues up from 16% in 2012, while Visa disclosed 20% organic growth in Services alongside five acquisitions in the past year [highlighted by Plaid, $5.3b pending acquisition, alongside CyberSource and an issuer processing business]). Valuation and estimates: For Visa, our updated target price is $228 (from $224), which equates to 30x our CY 2021 EPS estimate. For Mastercard, our updated target price is $350 (from $330), which is 32x our CY 2021 EPS estimate. 23 January 2020 Equity Research Americas | United States DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS