Deutsche Bank Raises PT on MasterCard (MA) to $340

Deutsche Bank raises its price target on MasterCard (NYSE: MA) from $250 to $340 while maintaining a Buy rating.

The firm said it would still be a buyer of MasterCard, even after the shares rose 13% yesterday. Deutsche believes that market expectations for MasterCard were slightly lower than Visa (NYSE: V) heading into Q1 earnings, given MA's huge run-up since its IPO, based on the assumption that "sell-side models would have caught up to MasterCard by now." The firm believes MasterCard's earnings outperformance has proved this idea wrong.

Deutsche now expects MasterCard to report FY08 EPS of $8.50 and revs of $4.9 billion, versus the Street estimates of $7.57 and $4.69 billion, respectively. For FY09, the firm sees EPS of $11.40 and revs of $5.5 billion, versus $9.34 and $5.28 billion estimates on the Street.

The firm believes MasterCard "deserves to trade at parity [to Visa] for the time-being given its stronger earnings momentum..."

Deutsche Bank's price target on MasterCard represents potential upside of about 20% from its most recent trade at $279.29 this morning.

MasterCard Incorporated provides transaction processing and related services to customers principally in support of their credit, deposit access, electronic cash and automated teller machine payment card programs, and travelers cheque programs. [BCS]

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