MasterCard's price of $93.70 is about 28 times higher than per-share earnings last year. That's a discount to rival Visa but still a premium to both American Express (AXP) and the average for industry, according to Bloomberg data.
"The company will grow, but I prefer recommending the stock when it's not at the high end of its price range," said Wedbush Securities analyst Gil Luria. "It's trading at 23 times 2016 earnings, while my target is based on 22 times earnings."
Luria maintains a neutral rating with a price target of $90 per share. The stock currently trades at almost $94.
"The higher the multiple, the less room there is for air," he added. "The growth for MasterCard has remained steady for years, but at some point they'll reach the law of large numbers, so it's hard seeing the multiple go a lot higher."
He attributes the company's success to the growth of the middle class across the globe and greater reliance on credit and debit cards compared with cash.
The credit card issuer beat first-quarter earnings per share forecasts by nine cents and reported year-over-year net revenue growth of 3%. The Purchase, N.Y.-based company predicts earnings of $3.44 a share this year, a gain of 12% from 2014.
"People love these kinds of stocks, and who can blame them?" said TheStreet's Jim Cramer, whose charitable trust, Action Alerts PLUS, owns MasterCard. "They have no credit risk, and are all about the worldwide adoption of plastic over paper."
The stock was upgraded to overweight from sector perform on Tuesday morning by Pacific Crest because of tighter regulation in Europe, which caps interchange fees.
"Issuers must balance the desire for offsetting lower interchange with other revenue streams like higher fees, which were up by over 50% following interchange regulation in Spain, and interest income," wrote analyst Josh Beck in a note, who maintains a price target of $110.
Shares of MasterCard returned 9% so far this year, while Visa added 7%.