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

Zacks Equity Research
·3 min read

MasterCard (MA) closed at $347.45 in the latest trading session, marking a +0.01% move from the prior day. This move lagged the S&P 500's daily gain of 0.57%. At the same time, the Dow added 1.44%, and the tech-heavy Nasdaq lost 0.61%.

Coming into today, shares of the processor of debit and credit card payments had gained 1.95% in the past month. In that same time, the Business Services sector gained 0.21%, while the S&P 500 gained 0.83%.

Wall Street will be looking for positivity from MA as it approaches its next earnings report date. On that day, MA is projected to report earnings of $1.53 per share, which would represent a year-over-year decline of 21.94%. Meanwhile, our latest consensus estimate is calling for revenue of $4.02 billion, down 8.96% from the prior-year quarter.

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

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.29% lower. MA is currently a Zacks Rank #3 (Hold).

Investors should also note MA's current valuation metrics, including its Forward P/E ratio of 42.85. This represents a premium compared to its industry's average Forward P/E of 25.6.

Also, we should mention that MA has a PEG ratio of 2.57. 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. MA's industry had an average PEG ratio of 2.26 as of yesterday's close.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 170, which puts it in the bottom 34% 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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