JP Morgan analysts maintain a positive outlook on Mastercard Inc. (NYSE:MA) following strong second-quarter results from rival Visa Inc. (NYSE:V).

In a research note released Tuesday, analyst Tien-tsin Huang indicated that Visa’s performance offers a “mildly positive risk-reward” for Mastercard heading into its earnings report this Thursday.

Visa Results Signal Healthy Global Environment

Visa reported better-than-expected results and raised its second-half guidance. Cross-border volume performed better than many feared, while currency volatility provided a tailwind.

JP Morgan noted that Visa’s global and U.S. volumes exceeded expectations. This suggests a stable operating environment for the broader payments sector.

“Visa’s April cross-border results were substantially better than feared and showed only a slight deceleration, which should ease concerns for Mastercard,” the analysts wrote.

Mastercard Volume Optics Present Temporary Headwinds

Despite the positive read-across, JP Morgan remains “modestly cautious” regarding Mastercard’s near-term volume optics. The firm points to the ongoing Capital One Financial Corp. (NYSE:COF) portfolio conversion as a primary factor. Analysts estimate this transition will create a $25 to 30 billion quarterly drag for Mastercard in the first quarter.

The report suggests that current Wall Street estimates may not fully account for this transition. While Mastercard historically grows revenue ~250 basis points faster than Visa, JP Morgan expects this premium to narrow.

JP Morgan cited Visa’s tokenization pricing action, which began in April, as a growth driver.

Outlook Into Mastercard’s Thursday Print

JP Morgan maintains an Overweight rating on Mastercard with a price forecast of $507.62. While volume optics may appear skewed due to the Capital One transition, the fundamental narrative remains intact.

The firm expects Mastercard shares to trade positively in sympathy with Visa’s results.

Mastercard Price Action

MA Price Action: Mastercard shares were up 4.48% at $530.37 at the time of publication on Wednesday, according to Benzinga Pro data.

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