Morgan Stanley analysts told investors in a note Monday that Visa (NYSE:V) and Mastercard (NYSE:MA) are positioned to keep benefitting from the better-than-expected travel recovery strength.
The firm sees more opportunity for the companies as data it tracks indicates a continued international travel recovery.
"We continue to believe that the ongoing international travel recovery has meaningful runway and can serve as an upside earnings driver for Visa and Mastercard this year," wrote analysts.
"We're encouraged by 1) recent commentary from US airlines that indicate travel demand remains especially strong, 2) the ongoing normalization to services spend from goods that's not yet fully back to prepandemic levels, and 3) passenger traffic data that we track shows there's still room to recover across international corridors," they added.
Furthermore, data that Morgan Stanley tracks across airports, airlines, and other third-party travel data sources reinforces the firm's view that international travel trends remain healthy.
"Visa's most recent intra-quarter data shows that card-present cross-border travel-related volume was at 139% of 2019's level in May (up from ~130% in April), supported by improving traffic in the US and Asia-Pacific travel corridors," said analysts.