Piper Sandler analyst Christopher Donat upgraded Visa (V) to Overweight from Neutral with a price target of $260, up from $234. The analyst cites "favorable" U.S. travel trends and the stock's valuation discount to MasterCard (MA) for the upgrade.
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Donat expects Visa to benefit more from a "vaccine-driven U.S. recovery" than Mastercard. Visa generated 45% of its pre-pandemic revenue from the United States, compared to only 32% for Mastercard, Donat tells investors in a research note.
He believes higher vaccine rates in the United States are already driving higher domestic activity and that faster growth in cross-border revenue should help Visa close its "6 turn valuation discount" to MasterCard.
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