Morgan Stanley analyst James Faucette reiterated Overweight ratings on Visa Inc
The analyst continues to expect that strength in international travel can drive an upside to Visa and Mastercard's earnings, especially given that cross-border volumes generate higher yields and margins than domestic volumes.
He still sees some pockets of recovery left to recapture and expects cross-border travel to be a key growth driver for V and MA.
He adds that bank card spending data suggest slowing domestic U.S. volume growth.
With V and MA historically traded at a 10-14x premium to the S&P (on an NTM P/E basis) and now trading at 6-9x, he thinks recent underperformance relative to the market offers a compelling valuation with macro risks fully priced in, supporting his Overweight call on the stocks.
Price Actions: V shares traded higher by 0.26% at $241.40 on the last check Wednesday. MA shares traded lower by 0.22% at $397.32.