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

Zacks Equity Research

MasterCard (MA) closed at $267.07 in the latest trading session, marking a -1.88% move from the prior day. This move lagged the S&P 500's daily loss of 1.56%. Meanwhile, the Dow lost 1.19%, and the Nasdaq, a tech-heavy index, lost 1.67%.

Heading into today, shares of the processor of debit and credit card payments had lost 3.94% over the past month, outpacing the Business Services sector's loss of 4.87% and lagging the S&P 500's loss of 1.22% in that time.

MA will be looking to display strength as it nears its next earnings release, which is expected to be October 29, 2019. On that day, MA is projected to report earnings of $2.01 per share, which would represent year-over-year growth of 12.92%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.42 billion, up 13.5% from the year-ago period.

MA's full-year Zacks Consensus Estimates are calling for earnings of $7.61 per share and revenue of $16.81 billion. These results would represent year-over-year changes of +17.26% and +12.42%, respectively.

Investors might also notice recent changes to analyst estimates for MA. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Within the past 30 days, our consensus EPS projection has moved 0.02% lower. MA currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MA has a Forward P/E ratio of 35.78 right now. For comparison, its industry has an average Forward P/E of 24.28, which means MA is trading at a premium to the group.

It is also worth noting that MA currently has a PEG ratio of 2.26. 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. The Financial Transaction Services was holding an average PEG ratio of 1.56 at yesterday's closing price.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 105, which puts it in the top 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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