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Pro Analysis

RBC makes MasterCard a top pick for 2017 on rising inflation, internet of things transactions

A woman walks past a Westpac bank advertisement in central Sydney, Australia.
Daniel Munoz | Reuters
A woman walks past a Westpac bank advertisement in central Sydney, Australia.

Investors should buy MasterCard shares as possible inflation and its new technology initiatives may lead to better financial results, according to RBC Capital Markets, which upgraded the payments company to a top pick from outperform.

"We are upgrading MasterCard. ... MA is cycling out of a period of trough earnings driven by the global economic backdrop [and has a] business model that offers an inflation call option," analyst Daniel Perlin wrote in a note to clients Thursday. "We believe three major innovation themes (tokenization, push payments, and IoT [internet-of-things]) will drive incremental secular growth into 2020."