A federal judge's call for a revised settlement from Visa Inc. (NYSE:V) and Mastercard Incorporated (NYSE:MA) after tossing out their $30 billion antitrust settlement on June 25 should not have much of an impact on their similar business models, according to an analyst.
U.S. District Judge Margo Brodie in Brooklyn wrote on Friday that the banks could handle a "substantially" larger settlement, arguing that the deal would have "disproportionately and inequitably" benefited small, local merchants over larger retailers such as Walmart Inc. (NYSE:WMT), Bloomberg reported.
Despite Brodie's opinion, JPMorgan remained Overweight on both Visa and Mastercard on the belief that "the diversity, complexity and scale of their business models give each substantial ability to preserve overall pricing and maintain earnings growth."
"In isolation (and acknowledging a wide spectrum of outcomes) we don't find the court's commentary overly concerning and based on the memo's text we think that V/MA's economic model is unlikely to be materially impacted by a revised agreement," JPMorgan analyst Tien-tsin Huang wrote in a note on Monday.
"In our view, a worse outcome would be if an agreement cannot be made and the litigation proceeds to trial, which widens the spectrum of potential outcomes."
Also Read: Visa, Mastercard's $30B Deal Hits A Snag: Judge Signals Rejection
The initial agreement, which is aimed at resolving two decades of legal battles over credit-card swipe fees, would have let big retailers charge higher fees on Visa or Mastercard credit cards while allowing smaller merchants to use pricing tactics that steer consumers to lower-cost cards, according to Brodie's opinion.
The "cost" of the settlement is the estimated $30 billion that the merchants would end up saving over five years, the judge noted.
But Brodie further wrote in her opinion that the estimated $6 billion in annual savings to merchants is "paltry compared to the $100 billion that merchants paid" in interchange fees on Visa and Mastercard transactions last year, according to Bloomberg. The two firms could "withstand a substantially greater judgment," she said.
The judge's opinion for a revised settlement is "a net-negative for the stocks," but it does not seem as bad as other recent bear views, Huang said.
Price Action: Visa dipped 0.06% to $262.32 by Monday's mid-afternoon trading, while Mastercard declined 0.65% to $438.30.
Two exchange-traded funds that give investors exposure to Visa and Mastercard stocks saw modest gains, however, by mid-afternoon. Shares U.S. Financial Services ETF (NYSE:IYG) rose by 0.33%, while SPDR Select Sector Fund – Financial (NYSE:XLF) gained 0.21%.
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聯邦法官於6月25日駁回Visa Inc. (NYSE:V)和Mastercard Incorporated (NYSE:MA)的300億美元反壟斷和解後,要求進行修改的呼籲,不應對它們類似的業務模式產生太大影響,根據分析師的說法。
布魯克林的美國地區法官Margo Brodie週五寫道,銀行可以處理一個“大幅度”的更大的和解,認爲該協議將“不成比例地和不公平地”使小型本地商家受益,而不是沃爾瑪公司等較大零售商,彭博社報道。
儘管布羅迪持有的意見,根大通仍然重倉Visa和萬事達,因爲“他們的業務模式的多樣性、複雜性和規模爲每個人提供了保持整體定價和保持盈利增長的大量能力。” 週一,摩根大通分析師Tien-tsin Huang在一份備忘錄中寫道,“孤立地(並承認廣泛的結果) ,我們並不認爲法院的評論過分關注,根據備忘錄的文本,我們認爲V/MA的經濟模型不太可能受到修訂協議的實質性影響”。
“儘管存在各種各樣的結果,我們認爲法院的評論並非過分關注,根據備忘錄文本,我們認爲V/MA的經濟模型不太可能受到修訂協議的實質性影響”儘管存在各種各樣的結果,摩根大通分析師Tien-tsin Huang在週一的一份備忘錄中寫道。
“在我們看來,更糟糕的結果將是協議無法達成,訴訟將進入審判階段,這將擴大潛在結果的範圍。”
Visa, Mastercard 300億美元交易出現障礙:法官表示拒絕
根據布羅迪的意見,旨在解決信用卡刷卡費20年的法律糾紛的最初協議將允許大型零售商對Visa或萬事達信用卡收取更高的費用,同時允許較小的商家使用定價策略,引導消費者使用低成本的信用卡。
據法官指出,“和解”的“成本”是商家在五年內可能節省的大約300億美元。
但布羅迪在她的意見中進一步寫道,相對於去年Visa和萬事達交易中支付的1520億美元的交易手續費,商家每年節省的60億美元“微不足道”,彭博社稱這兩家公司可以“承受更大的判決”。
法官對改版協議的意見是“對股票的淨負面影響”,但它似乎並不像其他最近的空頭觀點那樣糟糕,黃宗津說。
價格行動:週一下午交易時,Visa的股價下跌0.06%,至262.32美元,而Mastercard的股價下跌0.65%,至438.30美元。
然而,通過下午中期,兩隻跟蹤Visa和萬事達卡股票的交易所交易基金(ETF)略有增長。其中,美國金融服務ETF(IYG)漲0.33%,SPDR選擇性行業基金-金融(XLF)上漲0.21%。
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- Visa和Mastercard面臨潛在挫折,因爲紐約法官表明反對擬議的300億美元反壟斷和解協議
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