Prices for Visa (V) and Mastercard (MA) stocks have risen, boosted by hopes raised by the US government’s stimulus bill. However, a long term trend could emerge, as COVID-19 creates a new order of things.
Visa Inc (NYSE: V) and Mastercard Inc (NYSE: MA) stock prices have recently increased. Sources say that the stock prices of the payment giants have been a silver lining as the financial markets fluctuate due to COVID-19.
At the time of this report, the share prices of Mastercard (MA) were $ 256.48, + 19.41 (8.19%), in the252.47 −4.01 (1.56%). Visa stock price yesterday was $ 161.78, + 7.25 (4.69%), pre-market, $161.09 -0.69 (0.43%).
Visa (V) and Mastercard (MA) share prices rise due to expected stimulus
Sources say that at the start of the week, prices went up when payment service providers took off. This indicates that stock prices weren’t as bleak as many had expected. The stocks reaction was also part of a general increase in response to an expected stimulus package from the United States government.
However, many analysts still think stock prices are a good buy. There are many reasons why this might be possible. Most of them
First, the simple fact that almost everyone in the world is currently at home changes a lot. Internet shopping will reach a record level. And guess who will participate in the payment processing? Visa and Mastercard present a new paradigm where online activities will be accompanied by online consumer spending. This will also be matched by the US stimulus bill that has just been passed by the United States Senate. The huge amount of activity that will ensue will positively propel the payments market.
This also involves many risks. Mastercard has recently reduced its profit forecast to less than 10%. Sources say the company has also suspended earnings forecasts due to uncertainties related to COVID-19. The company said in a press release:
“However, due to the speed with which the COVID-19 situation is evolving and the unknown duration and severity of the event, we are suspending our 2020 annual outlook for growth in net revenues and operating expenses for the moment.”
While this is prudent based on corporate governance and ethics rules, it would be wrong for investors not to consider the upside. Consumer behavior is now leaning towards Internet activities. An essential part of this behavior is online payment.
COVID-19 will come and go
We can all be sure that things will not be the same after the dust settles after COVID-19. There will be a new order of things. Part of this command will put payment systems at the top of the hierarchy.
It will also set the pace for the new decade that humanity has entered. It will also give those who are smart enough great opportunities to profit not only in the short term but also in the longer term. Generation Z is also expected to grow. Millennials are entering their peak. The combination of these two markets gives payment systems a solid foundation for facing the future with and without COVID-19.
This future is assured provided they are properly aligned.
Christopher Haruna Hamman is a freelance content developer, crypto enthusiast and tech lover. He is also a content developer for Superstar, Strategy Demigod and Standup Guy.