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MasterCard (MA) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

MasterCard (MA) closed at $314.32 in the latest trading session, marking a +1.18% move from the prior day. This change outpaced the S&P 500's 0.19% gain on the day. Elsewhere, the Dow gained 0.31%, while the tech-heavy Nasdaq added 0.08%.

Heading into today, shares of the processor of debit and credit card payments had gained 4.95% over the past month, outpacing the Business Services sector's gain of 1.7% and the S&P 500's gain of 3.72% in that time.

Wall Street will be looking for positivity from MA as it approaches its next earnings report date. This is expected to be January 29, 2020. On that day, MA is projected to report earnings of $1.86 per share, which would represent year-over-year growth of 20%. Our most recent consensus estimate is calling for quarterly revenue of $4.39 billion, up 15.42% from the year-ago period.

Investors might also notice recent changes to analyst estimates for MA. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection has moved 0.02% higher. MA currently has a Zacks Rank of #3 (Hold).

Digging into valuation, MA currently has a Forward P/E ratio of 34.34. This valuation marks a premium compared to its industry's average Forward P/E of 21.89.

We can also see that MA currently has a PEG ratio of 2.15. 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. The Financial Transaction Services industry currently had an average PEG ratio of 1.72 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 47, putting it in the top 19% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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