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

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Zacks Equity Research
·3 min read
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In the latest trading session, MasterCard (MA) closed at $331.52, marking a -1.58% 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 0.23%, and the tech-heavy Nasdaq gained 0.54%.

Heading into today, shares of the processor of debit and credit card payments had gained 1.34% over the past month, lagging the Business Services sector's gain of 2.9% and the S&P 500's gain of 3.5% in that time.

Investors will be hoping for strength from MA as it approaches its next earnings release. In that report, analysts expect MA to post earnings of $1.53 per share. This would mark a year-over-year decline of 21.94%. Our most recent consensus estimate is calling for quarterly revenue of $4.02 billion, down 8.99% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.35 per share and revenue of $15.19 billion, which would represent changes of -18.28% and -10%, respectively, from the prior year.

Any recent changes to analyst estimates for MA should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.08% higher. MA is holding a Zacks Rank of #4 (Sell) right now.

Investors should also note MA's current valuation metrics, including its Forward P/E ratio of 53.08. This valuation marks a premium compared to its industry's average Forward P/E of 28.09.

It is also worth noting that MA currently has a PEG ratio of 3.18. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Financial Transaction Services was holding an average PEG ratio of 2.14 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 204, which puts it in the bottom 20% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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