Piper Sandler Initiates Coverage on Payments Stocks with Overweight Ratings

Piper Sandler analyst Bill Carcache initiated coverage of the payments and consumer finance sector with a "selectively constructive view," naming Visa (NYSE:V), Mastercard (NYSE:MA), American Express (NYSE:AXP), Capital One (NYSE:COF), and Affirm (NASDAQ:AFRM) as Overweight-rated picks.

Rating Change

Carcache launched coverage with Overweight ratings on all five stocks, without specifying a price target in the initial report.

Analyst's Rationale

Carcache believes the sector is undergoing a multiple reset, creating selective opportunities. He noted that companies with strong business models in payments and consumer finance can deliver sustainable earnings growth, especially as the macroeconomic environment improves and consumer spending rises.

Context

The recommendations come after a period of volatility in the sector due to inflation and interest rate concerns. Other analysts have mixed views, but Piper Sandler sees the recent multiple compression as offering attractive entry points.

Conclusion

The new coverage reflects confidence in the sector's long-term prospects, but investors should consider risks related to valuations and regulatory changes.