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MasterCard (MA) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, MasterCard (MA) closed at $356.94, marking a +0.39% move from the previous day. The stock lagged the S&P 500's daily gain of 0.64%. Meanwhile, the Dow gained 0.65%, and the Nasdaq, a tech-heavy index, added 0.14%.

Heading into today, shares of the processor of debit and credit card payments had gained 4.51% over the past month, outpacing the Business Services sector's gain of 2.4% and the S&P 500's gain of 3.19% in that time.

Wall Street will be looking for positivity from MA as it approaches its next earnings report date. The company is expected to report EPS of $1.53, down 21.94% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $4.02 billion, down 8.96% from the year-ago period.

MA's full-year Zacks Consensus Estimates are calling for earnings of $6.35 per share and revenue of $15.20 billion. These results would represent year-over-year changes of -18.28% and -9.99%, respectively.

Any recent changes to analyst estimates for MA should also be noted by investors. These revisions help to show the ever-changing nature of near-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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 0.03% higher within the past month. MA currently has a Zacks Rank of #4 (Sell).

In terms of valuation, MA is currently trading at a Forward P/E ratio of 56.03. Its industry sports an average Forward P/E of 26.87, so we one might conclude that MA is trading at a premium comparatively.

Also, we should mention that MA has a PEG ratio of 3.36. 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 2.13 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 186, which puts it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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