Seeking Alpha

Nomura trims payment network EPS estimates; more may come

|By: , SA News Editor

Nomura Instinet analyst Bill Carcache cuts EPS and revenue growth estimates on payment networks Visa (V -5.3%), Mastercard (MA -6.7%), PayPay (PYPL -7%), and Square (SQ -10.6%) to reflect Covid-19 headwinds.

Acknowledges that further negative revisions may be needed.

"Despite our lack of confidence in the near-term outlook, our bullish longer-term view of V, MA, and PYPL is unchanged," Carcache writes; keeps all three at Buy rating.

Stays cautious on Square, doe to its large exposure to small- and medium-sized businesses, "which we believe will be disproportionately challenged if virus fears push the economy into recession;" keeps Square at Reduce rating.

Nomura Instinet trims Visa's FY Q2 estimate to $1.40 from $1.43 and 2020 EPS estimate to $6.12 from $6.15 to reflect slower revenue growth due to the impact of the coronavirus.

Cuts Mastercard Q1 EPS estimate to $1.89 from $2.08 and 2020 estimate to $8.83 from $8.98.

Trims PayPal Q1 EPS estimate to 76 cents from 77 cents and full-year estimate to $3.40 from $3.41.

Cuts Square's 2020 adjusted EPS estimate to 92 cents from 94 cents and 2021 adjusted EPS estimate to $1.34 from $1.36.

Previously: PayPal sees some signs of stabilization amid virus (March 5)