These 2 Payment Giants Are On Tap

Payments giants Visa (V) and Mastercard (MA) are set to report earnings this week. Visa will report fourth-quarter earnings late Tuesday, while Mastercard will report third-quarter earnings early Thursday. Visa stock and Mastercard stock rose slightly Monday.


Jefferies analysts said in an Oct. 22 note to clients they expect muted results due to the Covid-19 delta spike in August and a deceleration in e-commerce.

“For Visa, we expect most top-line upside in Data Processing on higher processed transactions, driven by a steady recovery in cross-border (activity),” wrote analyst Trevor Williams. 

Visa Earnings

Estimates: FactSet analysts expect Visa earnings of $1.55 a share for fiscal Q4, 38% above the year-earlier quarter. Full-year EPS should rise 15% to $5.81.

Revenue for the quarter is seen growing 28% year over year to $6.52 billion, to cap the year with $24.06 billion, a 10% annual gain.

Results: Check back Tuesday after the close.

In July, the Dow Jones giant ventured into the buy-now-pay-later domain, following in the footsteps of PayPal (PYPL) and several others. The program is called Visa Installments Solution. But unlike PayPal and other BNPL providers, which screen consumers for credit worthiness, Visa will not perform risk assessment on whether to extend installment loans for credit card issuers. 

Visa also dipped its toe in NFTs. In August, it bought a CyberPunk, a non-fungible token of a digital artwork, for about $150,000 in Ethereum.

Visa Stock

Shares rose 1.15% to 233.88 in Monday’s stock market trading. Visa stock is in a flat base with a buy point of 252.77, according to MarketSmith.

Visa’s relative strength line is trending lower. Its RS Rating is 50 out of a possible 99, while its EPS Rating is 78. Both are below the 80 IBD recommends.

Rival Mastercard stock edged up 0.6% to 360.86. Its relative strength line also is slumping, near all-time lows. Mastercard’s RS Rating is just 37, while its EPS Rating is 79.

Among other payments stocks Square (SQ) rallied 3.5% on Monday. Square is getting into the BNPL market via a pending $29 billion acquisition of AfterPay.

PayPal stock climbed 2.7% Monday after saying it wouldn’t buy Pinterest (PINS). PYPL stock tumbled 10% last week on PINS takeover buzz.

Mastercard Earnings

Estimates: Analysts expect Mastercard earnings per share of $2.19, 37% higher than a year ago. Sales are seen coming in at $4.95 billion, a 29% year-over year increase.

Results: Check back Thursday.

Last month, Mastercard announced it too was launching a BNPL program in the U.S. Dubbed Mastercard Installments, it’s slated to be rolled out to other markets in the future.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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