Analysts at Cowen & Co are throwing in the towel on the recent high-flying credit card processors MasterCard (MA) and Visa (V), downgrading both from outperform to underperform, citing deteriorating fundamentals. Cowen completely bypassed a neutral rating on the two. Many have thought that both these companies would be shielded from the credit mess, since they don’t take on credit risks. But, according to Cowen, they cannot escape the slowing economy.
Cowen said recent data from both MasterCard and Visa indicated deteriorating credit and debit purchase volume growth for the past 3 months, with a significant drop in October’s metrics.