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Visa and Mastercard Suspend Russian Operations

For both networks, transactions related to Russia accounted for 4% of net revenue.

Visa VISA and Mastercard MA announced that they have suspended operations in Russia. As a result, cards issued by Russian banks will no longer work outside Russia, and cards issued outside Russia will not work within Russia. For both networks, transactions related to Russia accounted for 4% of net revenue, so this decision will represent a modest headwind this year. However, we believe both networks were positioned for outsize growth in 2022, as a rebound in travel and cross-border volume should positively affect revenue, and interim results announced by Visa suggest cross-border volume is picking up as the omicron variant has faded. Taking these factors in balance, we believe both networks will still enjoy solid growth this year. After reviewing our projections, we will maintain our fair value estimates of $221 for Visa and $369 for Mastercard, as well as our wide moat ratings for both.

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About the Author

Brett Horn

Senior Equity Analyst
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Brett Horn, CFA, is a senior equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers insurers and credit bureaus. He also oversees the equity research team’s stewardship rating methodology.

Before joining Morningstar in 2006, Horn worked in the banking industry for about a decade, most recently as a commercial loan officer for First Bank, where he was responsible for underwriting loans and managing relationships with middle market clients. Before that, Horn worked for Mizuho Corporate Bank, where he managed loan portfolios and client relationships, primarily with Fortune 500 companies.

Horn holds a bachelor’s degree in business administration, with a concentration in finance, from the University of Wisconsin and a master’s degree in business administration from the University of Illinois. He also holds the Chartered Financial Analyst® designation. He ranked first in the business and industrial services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

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