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MasterCard (MA) Gains As Market Dips: What You Should Know

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In the latest trading session, MasterCard (MA) closed at $322.59, marking a +1.35% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.07%. At the same time, the Dow added 0.27%, and the tech-heavy Nasdaq gained 0.02%.

Coming into today, shares of the processor of debit and credit card payments had lost 11.06% in the past month. In that same time, the Business Services sector lost 8.85%, while the S&P 500 lost 7.99%.

Investors will be hoping for strength from MasterCard as it approaches its next earnings release. On that day, MasterCard is projected to report earnings of $2.35 per share, which would represent year-over-year growth of 20.51%. Our most recent consensus estimate is calling for quarterly revenue of $5.26 billion, up 16.14% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.52 per share and revenue of $22.16 billion. These totals would mark changes of +25.24% and +17.34%, respectively, from last year.

Any recent changes to analyst estimates for MasterCard should also be noted by investors. 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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.37% higher. MasterCard is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, MasterCard is currently trading at a Forward P/E ratio of 30.24. For comparison, its industry has an average Forward P/E of 13.97, which means MasterCard is trading at a premium to the group.

It is also worth noting that MA currently has a PEG ratio of 1.5. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MA's industry had an average PEG ratio of 1 as of yesterday's close.

The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 91, putting it in the top 36% 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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