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Mastercard very attractive stock, reckons Jefferies

Last updated: 19:50 25 Aug 2015 BST, First published: 17:50 25 Aug 2015 BST

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Broker Jefferies had a look at Mastercard today

Mastercard (NYSE:MA) shares went almost 3% higher in New York as US broker Jefferies issued a 'buy' on the stock ahead of an analyst day on September 9.

The day is likely bring a mid-quarter update on key metrics for the combined July/August period on the financial services and credit card group, the broker noted.

Notably, Jefferies expects the firm's presentations and demos will showcase active investments in such things as the Internet of Things, loyalty, and analytics.

"This may also include deeper discussions regarding how MA's 2014/15 acquisitions are contributing to the company's long-term growth prospects," said analyst Jason Kupferberg.

He views Mastercard and Visa (NYSE:V) as "very attractive" stocks with proven EPS protection power.

The broker forecasts significant acceleration in MA's net revenue growth, to 11.8% in 2016 from 3.3% in 2015, driven by anniversarying of multiple headwinds, it said.

Jefferies repeated a price target of US$112 a share based on a multiple of 23 times its calendar 2017 EPS estimate of  US$4.73 and discounted cash flow.

The current share price is US$90.60, an increase of 3.07% on the day.

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