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MasterCard (MA) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, MasterCard (MA) closed at $264.51, marking a -0.85% move from the previous day. This change lagged the S&P 500's daily loss of 0.13%. At the same time, the Dow lost 0.13%, and the tech-heavy Nasdaq lost 0.24%.

Prior to today's trading, shares of the processor of debit and credit card payments had gained 6.83% over the past month. This has outpaced the Business Services sector's gain of 5.99% and the S&P 500's gain of 4.13% in that time.

Investors will be hoping for strength from MA as it approaches its next earnings release. On that day, MA is projected to report earnings of $1.82 per share, which would represent year-over-year growth of 9.64%. Our most recent consensus estimate is calling for quarterly revenue of $4.10 billion, up 11.81% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.60 per share and revenue of $16.78 billion. These totals would mark changes of +17.1% and +12.22%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for MA. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.01% lower within the past month. MA is currently a Zacks Rank #3 (Hold).

Looking at its valuation, MA is holding a Forward P/E ratio of 35.09. This represents a premium compared to its industry's average Forward P/E of 23.87.

It is also worth noting that MA currently has a PEG ratio of 2.11. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Financial Transaction Services stocks are, on average, holding a PEG ratio of 1.97 based on yesterday's closing prices.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 29, which puts it in the top 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow MA in the coming trading sessions, be sure to utilize Zacks.com.


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