Daiwa Capital Markets has moved both Mastercard and Visa to Outperform after the companies released quarterly results that the brokerage described as solid and supportive of more attractive risk-reward profiles. The analysts said the firms' results and outlooks outweigh lingering regulatory and policy concerns.
Mastercard results and outlook
Daiwa said Mastercard's fourth-quarter performance reinforced confidence in the company's medium-term prospects. The card network reported net revenue growth of 18% year on year, or 15% on a currency-neutral basis. Non-GAAP earnings per share rose 25% year on year.
The firm attributed the EPS gain to several factors cited by Mastercard: stable transaction volume growth, strong momentum in value-added services, and lower expenses that were supported by government grants and a lower-than-expected tax rate. Management guided fiscal 2026 revenue growth toward the high end of a low double-digit range, while operating expenses were guided to increase at a low double-digit rate.
Daiwa also underscored a commercial development that it views as lowering uncertainty for Mastercard: the renewal of the company's agreement with Capital One. The analysts said the deal secures Mastercard's role in a large share of new credit card issuance in the U.S. and Canada.
Following the results and these developments, Daiwa raised its rating on Mastercard to Outperform and set a target price of $610. The brokerage argued that Mastercard's shares remain inexpensive relative to the company's growth prospects and that policy risks around credit card regulation are unlikely to materialize.
Visa results and outlook
Daiwa said Visa's outlook remains intact despite policy-related noise. In its most recent quarter, Visa reported net revenue growth of 15% and non-GAAP EPS of $3.17, also up 15% from the prior year.
Revenue exceeded expectations, the analysts said, driven by stronger-than-anticipated performance in value-added services, better results in commercial and money movement solutions, and favorable currency effects. However, Visa's higher marketing spend limited the degree of profit upside.
Visa guided for fiscal 2026 net revenue growth in the low double digits and EPS growth at the high end of a low double-digit range, supported by a lower tax rate. Daiwa expects Visa to deliver underlying EPS growth of about 13% to 14% over the medium term. The projected drivers listed by the analysts include continued digitalization of payments, expansion in emerging markets, and greater contributions from Visa Direct and other value-added services. They also noted potential upside from services tied to large global sporting events.
On the basis of these factors and following recent share price weakness that improved the longer-term risk-reward balance, Daiwa upgraded Visa to Outperform with a $370 target price. The analysts said regulatory and litigation risks are already reflected in Visa's valuation.
Context for investors
Daiwa's upgrades reflect a view that both networks can sustain growth through continued product and geographic expansion, while near-term policy risks are either manageable or already priced in by the market. The brokerage's outlook emphasizes revenue diversification through value-added services and digital payment solutions as key earnings drivers.