Investing.com — Clear Street launched coverage of the payments sector on Thursday, initiating Buy ratings on and while starting and at Hold.

Analyst Owen Lau initiated coverage of Visa with a Buy rating and a $403 price target, based on a 27x P/E multiple applied to its fiscal 2027 EPS estimate of $14.95.

 The firm called Visa “one of the highest-quality compounders” in its coverage, citing adjusted operating margins exceeding 67% and conversion of roughly half of net revenue into free cash flow. 

Lau noted valuation has come down over the past two years due to AI, stablecoins and macro concerns, viewing current levels as “an attractive entry point.”

Mastercard was also initiated at Buy, with a $617 price target based on 27x its 2027 EPS estimate of $22.85. 

The analyst noted Mastercard has underperformed the S&P 500 year-to-date, pressured by its use as a funding source for AI trades and cross-border volume deceleration, but said the stock “hasn’t received enough credit for its healthy network, robust growth in VAS, and optionality in agentic commerce.”

Block was initiated at Hold with an $82 price target, with Clear Street noting improving fundamentals but preferring to “wait for a better entry point” following the company’s pivot toward an AI-orchestrated commerce platform.

PayPal was also started at Hold with a $61 price target. Clear Street said PayPal’s story “is more likely to inflect positively in 2027-2028 than in 2026,” while noting the reported $53 billion buyout offer from Stripe and Advent as a key near-term catalyst.