Stock Picks: MasterCard, Netflix, Nvidia, Visa

Wall Street analyst opinions on stocks making headlines in Friday's market

American Superconductor Corp.: Wunderlich Securities equity analyst Theodore O'Neill reiterated a buy rating and $50 price target on shares of American Superconductor Corp. (AMSC) on May 14.

On May 13, the maker of wind turbine components and transmission lines reported adjusted fiscal fourth-quarter earnings per share (EPS) of 18 cents, above the average 16 cents estimate of analysts surveyed by Bloomberg. Revenue rose 3.2% to $87.6 million, above the average estimate of $84.9 million.

Management also raised its forecast for the year ending March 31, 2011. Revenue for fiscal 2010 will be $415 million to $425 million, up from an earlier forecast of $400 million, the Devens, Massachusetts-based company said in a statement. It said net income will more than double to 80 cents to 85 cents a share.

"We believe American Superconductor represents one of the best opportunities in a U.S.-based wind energy company," wrote O'Neill in a note. He said the company is "experiencing nearly two times the industry average growth rate," with revenue up 73% in fiscal 2010 (ended March). "Although we forecast the rate to slow, we expect profitability to improve significantly," he wrote.

O'Neill said the company is on track to earn $1.95 in non-GAAP EPS in calendar 2011.

MasterCard Inc. and Visa Inc.: Friedman Billings Ramsey equity analyst Scott Valentin maintained outperform ratings on shares of MasterCard Inc. (MC) and Visa Inc. (V) on May 14.

On May 14, shares of MasterCard and Visa fell after the U.S. Senate approved an amendment that would empower the Federal Reserve to impose limits on debit-card fees collected by the biggest banks as part of the financial-overhaul bill.

Lawmakers voted 64-33 on May 13 to approve the measure from Senate Majority Whip Richard Durbin, who seeks to ensure that debit-card interchange, or "swipe" fees, charged to merchants "are reasonable and proportional" to the cost of processing transactions. Payment networks like and MasterCard and Visa set interchange rates and pass the fees along to card-issuing banks.

Merchants last year paid $19.7 billion in fees tied to debit transactions processed by Purchase, New York-based MasterCard and San Francisco-based Visa, with more than half that amount paid to banks as interchange, according to the National Retail Federation.

The legislation could hurt revenue at MasterCard and Visa, which collect royalties from banks based on card-spending volumes.

In a note, Valentin said that while the overall bill and the interchange-fee amendment must still be reconciled with the House of Representatives, given its significant margin of passage, he considers it unlikely to be removed.

The analyst said he would use a substantial sell-off in MasteCard and Visa as "a buying opportunity" in the shares as he continues to believe a secular shift from paper forms of payment to plastic and electronic payments underpins the companies' "above-average" long-term earnings growth rates.

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