Cowen and Company Upgrades MasterCard to Outperform

Barron’s notes Cowen’s latest report on MasterCard (MA):

“We are upgrading MA from Underperform….The combination of positive [credit-card] revenue-growth rates with continued declines in discretionary advertising should continue to help MA expand Ebit [earnings before interest and taxes] margins and generate 20%-plus EPS growth rates this year, while sustaining sector-high, 30%-plus ROIC [return on invested capital] metrics. While in this upgrade, we aren’t calling a bottom to the ongoing economic recession, we point to the resilience [of] MA’s model….MA trades at 14 times projected [calendar] ’09 EPS. Market cap: $21.1 billion.”

Those are excellent points. I continue to rate MasterCard a Buy.

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