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Headquartered in Purchase, New York, Mastercard Incorporated (MA) is a global leader in transaction processing and payment solutions. Valued at a market capitalization of $481.6 billion, the company provides payment processing services for credit and debit cards, electronic cash, ATMs, and travelers' checks.
Shares of this payment behemoth have slightly underperformed the broader market over the past year. MA has gained 34.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 36.8%. In 2024 alone, MA’s stock rose 23%, compared to the SPX’s 25.7% rise on a YTD basis.
Narrowing the focus, MA has lagged behind to the Financials Select Sector SPDR Fund (XLF). The exchange-traded fund has gained 46.1% over the past year and 30.8% in 2024, outpacing MA’s returns.
On Oct. 31, MA released its Q3 earnings report, and its stock dipped 2.7% despite surpassing the market’s EPS and revenue expectations. It reported a net revenue of $7.4 billion and adjusted EPS of $3.89.
For the current fiscal year, ending in December, analysts expect MA to report an EPS growth of 17.9% to $14.45 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 38 analysts covering MA stock, the consensus rating is a “Strong Buy.” That’s based on 31 “Strong Buy” ratings, two “Moderate Buys,” and five “Holds.”
This configuration is less bullish than three months ago, with 32 analysts suggesting a “Strong Buy.”
On Nov. 4, Morgan Stanley (MS) raised its price target for Mastercard to $544 from $540, maintaining an “Overweight” rating. While spending trends remain strong and international travel growth offers potential upside, the firm lowered its FY2025 EPS estimate due to changes in taxes related to Singapore's Pillar II global minimum tax rules.
The mean price target of $553.08 represents a 5.4% premium to MA’s current price levels. The Street-high price target of $605 suggests an upside potential of 15.3%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
