Visa and Mastercard will do well once again in 2023 after outperforming last year, according to KeyBanc. Analyst Josh Beck raised his rating to overweight from sector weight on each stock, saying both credit card companies will benefit as fintech grows to an embedded model used by merchants, businesses, consumers and issuers. “V/MA: upgrade to OW as our prior travel-related dislocation concerns have faded and new flows (e.g., P2P, B2B, etc.) beyond consumer card are improving the diversification and growth durability,” Beck wrote in a Sunday note. Both payments companies outperformed in 2022, with shares of Visa down more than 3% for the year, and Mastercard more than 2% lower. The analyst expects the growth runway will continue to unfold for both, as they see new payment flows in 2023. New flows revenue could represent more than 50% of growth through 2026 for Visa, according to the note. It can also rise to more than 40% of the business, up from roughly one-third last year. “Key drivers include VAS (issuer processing, gateway, fraud, analytics, tokens), B2B (commercial/virtual cards, X-border, AP/AR), Visa Direct (e.g., disbursements with customers including Stripe, Adyen, etc.) and other (e.g., government), which in our view enhances the diversity of growth beyond core carded B2C use cases,” read the note. “VAS” refers to value added services. Meanwhile, new flows revenue could account for more than 50% of growth for Mastercard through 2024, the analyst said. It could account for more than 50% of the business, up from more than 45% in 2021, the note read. “Key drivers include VAS (fraud, analytics, processing, consulting), B2B (commercial/virtual cards, RTP, AP/AR), Mastercard Send (e.g., disbursements with customers including Citi, PayPal, etc.) and other (e.g., Bill Pay), which in our view enhances the diversity of growth beyond core B2C use cases,” the note read. Shares of Visa are implied to have roughly 3% downside to the analyst’s price target of $210, raised from $187. Meanwhile, shares of Mastercard are expected to advance more than 15% to the analyst’s $425 price target, which was increased from $305. Both stocks rose more than 1% in Monday premarket trading. —CNBC’s Michael Bloom contributed to this report.