The stock needs about $20 of next-year earnings at a 28 times multiple. I expect closer to $23 as services stay faster than volume and the share count keeps falling.
Key points
- $35.1 billion trailing revenue grew 14% in the latest half, with services 41% of Q2 sales.
- 60.2% Q2 operating margin, up from 54.3% two years earlier, as mix and pricing outran volume.
- 28 times my 2027 earnings of $22.90 a share produces a $640 target, 12% above $570.48.
The call
The $570 price needs roughly $20 of earnings in twelve months if the multiple stays near 28 times, or it needs the multiple to stay above 30 times on slower growth. Trailing earnings are $18.70 a share on 870 million shares.
I expect $22.90 because revenue can grow about 11% in 2027 after a 14.5% 2026 year, net margin holds near 46%, and buybacks cut shares to about 845 million. Cross-border assessments still run ahead of volume, and services grew 18% currency-neutral in Q2.
Revenue ($ billions)SEC filings through FY2025; my estimates for 2026E and 2027E. As of Oct 8, 2026.
Valuation
| Item | Figure |
|---|
| FY2026 revenue (my estimate) | $37.5 billion |
| FY2027 revenue (my estimate) | $41.7 billion |
| FY2027 net margin | 46.2% |
| FY2027 net income | $19.3 billion |
| Diluted shares in 12 months | 845 million |
| FY2027 EPS, then 28 times | $22.90, $640 |
Twenty-eight times is below the trailing 30.5 times because the ten-year yield is 5.3%. If I am right on earnings and the multiple holds, the stock still works; if the multiple compresses to 25 times I lose about 10%. That skew supports a buy, not a strong buy.
Operating margin by quarterSEC XBRL company facts, quarters ending Sep 2024 to Jun 2026.
Risks
- Consumer or travel spending slows; watch switched-transaction and cross-border volume growth falling into the mid-single digits.
- Network-fee or routing rules cut assessments; watch European Commission and U.S. merchant-litigation dockets.
- Services growth fades if security and data attach rates stall; watch the services share of revenue dropping below 40%.
What would change my mind
A quarter of currency-neutral revenue growth in the high single digits with operating margin back under 56% would force a lower target.