Notable Calls

SunTrust is out with a nice call on Mastercard (NYSE:MA) raising their 2008 and 2009 EPS estimates to the Street high. While the proximate cause of their more aggressive view is the company's higher long-term EPS growth guidance, issued at last week?s investor day, it is some of the more nascent growth opportunities cited and the discussion of relatively strong non-US volume growth which augment firm's confidence.

Firm is raising their price target from $350 to $390 and are again moving 2008 and 2009 EPS estimates to the Street high. New 2008 and 2009 EPS estimates are $8.94 and $12.17, respectively, compared with prior 2008 and 2009 EPS estimates of $8.68 and $11.08.

MasterCard seems ideally positioned to continue capitalizing on the global secular shift to electronic payments. While they believe this is well understood, the power of this growth driver is only now coming into focus as the company enjoys above-trendline volume growth despite deceleration in the US, its largest single market.

They are also encouraged by management's goal of 300-500 basis points of annual operating margin improvement. It is their opinion that MasterCard will outperform this target over the next few years as it scales its processing infrastructure and rationalizes is operating expenses. Even longer term operating leverage of this magnitude suggests sustainable EPS growth of at least 20%, making MA one of the best growth names in firm's universe.

Notablecalls: SunTrust's pretty much the axe in both MA & V. They have been ahead of the pack for quite some time and it seems they are doing it again. With the stock technically so strong I would expect ample upside today. Be early and be agressive.

I feel for the shorts. Truly do. MA has been a short buster lately.

Note that SunTrust's $390 tgt is also the new Street high.