Latest news with #JasonKupferberg
Yahoo
09-05-2025
- Business
- Yahoo
Mastercard faces cross-border headwinds
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Mastercard reported last week that cross-border payments volume growth slowed for the first quarter, with that business emerging as a potential pain point for the card network. Analysts who follow the company attributed the slowdown in growth to reduced travel in regions like the Middle East and Africa. In addition, warning signs lurk on the horizon in the form of President Donald Trump's trade war, which has sparked economic uncertainty and could result in less spending in discretionary sectors like travel, those analysts said. 'It's not universal, it's in certain corridors, but we have some modest shifts in travel patterns,' Bank of America analyst Jason Kupferberg said in an interview. Purchase, New York-based Mastercard's first-quarter cross-border payment volume growth decelerated to 15% growth, from 19% for the first quarter of 2024. Those figures include international travel and e-commerce orders between countries. About 37% of Mastercard's total revenue comes from cross-border travel and international online orders, estimated Raymond James analyst John Davis. That figure is roughly 36% for Visa, Davis said, suggesting the larger rival card network is also vulnerable to a slowdown in global travel and international e-commerce. 'The fees [credit card networks] charge on cross-border volumes are multiples of what they charge for domestic transactions,' Morningstar analyst Brett Horn said in an interview. 'It's a small piece of the overall payments world, but it's a very big piece of their revenue.' Travel and e-commerce purchases are also largely discretionary and could slide in the event of an economic downturn, Horn said, although he stressed that the recent softness in Mastercard's cross-border payment growth could simply mark a return to normal, after travel and e-commerce surged in the years following the COVID-19 pandemic. How big of an impact economic uncertainty will have on travel and international orders remains to be seen, KBW analyst Sanjay Sakhrani said in an interview. But he stressed that consumer spending and job growth proved resilient in recent months. 'When you look at the spending trends thus far, they've held up pretty well, and it's not very different at Mastercard,' he said. Mastercard also benefits from the diversity of its business, Kupferberg said. 'They operate across the whole spectrum of consumers from an income perspective, and merchants across any and all verticals.' The upcoming merger between Capital One and Discover is another potential pain point for Mastercard. Capital One plans to move its Mastercard-branded debit cards to Discover's network, although Capital One has not said when that will happen. Mastercard factored the loss of those debit cards into its forecast for the year, executives said in a May 1 earnings call, but provided few specifics. The company did not disclose, for example, how many Mastercard-branded debit cards are in Capital One's debit card portfolio. 'A low single digit percentage' of Mastercard's debit cards are part of Capital One, TD Cowen analyst Bryan Bergin said in an interview. Capital One is unlikely to drop its Mastercard-branded credit card portfolio, Davis said in an interview. Such a move would be more difficult thanks to the complex nature of credit card transactions, he said. 'Debit is just pulling money out of a bank account,' Davis said. 'A credit card is a more sophisticated product.' The spokesperson did not immediately respond to questions about the number of Mastercard branded debit cards on Capital One's network, or the percentage of Mastercard's business that comes from cross-border payments. In response to questions about cross-border payments and the loss of Capital One's debit card portfolio, a Mastercard spokesperson referred to comments made by Chief Financial Officer Sachin Mehra during the earnings call. 'The headline is that our business remains strong and consumer spending remains healthy,' Mehra said during prepared remarks in the May 1 call. The time of Easter and other holiday may have also impacted travel spending, he said. 'Easter occurred in April this year as compared to the end of [the first quarter] in 2024,' Mehra said. 'As it relates to cross-border travel, we saw a pull-forward of spending into [the fourth quarter] in 2024 from [the first quarter] in 2025.' Mastercard reported $3.28 billion in net income for the first quarter, a roughly 9% increase from $3.01 billion in net income for the year-ago quarter. The company also recorded $7.25 billion in net revenue for the quarter, a 14% increase compared to the $6.35 billion for the year-earlier period. Recommended Reading Mastercard invests $300M in Corpay unit Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
26-04-2025
- Business
- CNBC
Bank of America says these tech stocks are heating up ahead of earnings
Bank of America named a slew of buy-rated tech stocks ahead of earnings. The firm says investors should buy the weakness on a host of companies like Block , Spotify, PayPal and Microsoft. Block Shares of Block have plenty room to run, according to the firm. The fintech payment company's first quarter earnings report is scheduled for May 1 with analyst Jason Kupferberg telling clients in a recent note to buy the dip. "We believe the stock is not being given enough credit for the general resilience the business has shown to date as well as its opex [operating expense] discipline," he wrote. Kupferberg says if management cuts its top-line guidance that would be "welcomed" as it would reset the bar for already high expectations. The firm also lowered its price target to $80 per share from $94. "We reiterate our Buy rating based on business model quality, tools to protect AOI [adjusted operating income] guidance, and valuation," he wrote. The stock is down 31% this year. Microsoft The firm is doubling down on shares of the tech giant. "Still best positioned for AI cycle," analyst Brad Sills wrote recently. Microsoft is scheduled to unveil its third quarter earnings on April 30 and Sills says investors should stick with the stock. "The focus this quarter is likely to be on Azure guidance and capex," the firm wrote. Azure is Microsoft's cloud computing platform. Sills added that he believes rumors of a Microsoft pull back on capex are overdone noting that the company remains committed to "building capacity for the long term." Meanwhile, shares are down 7% this year and Sills lowered his price target to $480 per share from $510. "Reiterate Buy on our top pick," he said succinctly. Roblox The gaming tech company is firing on all cylinders, according to analyst Omar Dessouky. Roblox is quickly making inroads in innovation and is well positioned for further share gains, the firm said in a note recently. "RBLX's ability to execute became clear in 2024 with numerous efficiency improvements and growth surprises," he wrote. Dessouky says the setup for Roblox's first quarter results on May 1 looks "favorable" with "execution likely excellent, again." Further, the firm says Roblox is "still not [a] widely held" stock among investors. However, "that could change as investors search for secular growth resilient to tariffs or a consumer spending slowdown in 2H25," so clients should buy Roblox now, he went on to say. Shares are up 14% this month. Block "We think a cut of 2025 top-line guidance to more achievable levels would be welcomed. We reiterate our Buy rating based on business model quality, tools to protect AOI guidance, and valuation. ... .We believe the stock is not being given enough credit for the general resilience the business has shown to date as well as its opex discipline..." Microsoft "Still best positioned for AI cycle. ... .The focus this quarter is likely to be on Azure guidance and capex. ... .There have been rumors that Microsoft is pulling back on capex. While Microsoft is likely shifting capex within geographies, the company remains building capacity for the long term. ... .Reiterate Buy on our top pick." Spotify "We are confident that SPOT's 1Q25 results will be at least in line with guidance on key metrics including revenue, premium subscribers and MAUs [monthly active users]. ... .Notably, it is our view that SPOT's subscription model should be more defensive/utilitylike amid the current macro uncertainty. However, recent volatility could have an impact on future advertising growth, especially since our forecasts contemplate a 2H acceleration." PayPal "PYPL reports on 4/29. Measurable progress against strategic initiatives to accelerate branded TPV [total payment volume] is key to turning around weak sentiment, and 1Q is unlikely to be the quarter when this happens, especially amid macro turmoil. ... .PYPL has a strong brand, balance sheet, and scale, and given progress on the turnaround, we rate it Buy."
