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

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

MasterCard (MA) closed at $331.78 in the latest trading session, marking a +1.09% move from the prior day. This move lagged the S&P 500’s daily gain of 1.6%. Meanwhile, the Dow gained 1.34%, and the Nasdaq, a tech-heavy index, added 2.26%.

Heading into today, shares of the processor of debit and credit card payments had lost 7.81% over the past month, lagging the Business Services sector’s loss of 4.9% and the S&P 500’s loss of 5.3% 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 $1.63, down 24.19% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.93 billion, down 11.99% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.62 per share and revenue of $15.58 billion, which would represent changes of -14.8% and -7.72%, respectively, from the prior year.

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. As a result, we can interpret positive estimate revisions as a good sign for 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. The Zacks Consensus EPS estimate has moved 0.92% higher within the past month. MA currently has a Zacks Rank of #3 (Hold).

Investors should also note MA’s current valuation metrics, including its Forward P/E ratio of 49.56. For comparison, its industry has an average Forward P/E of 25.21, which means MA is trading at a premium to the group.

Investors should also note that MA has a PEG ratio of 2.74 right now. 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. Financial Transaction Services stocks are, on average, holding a PEG ratio of 1.45 based on yesterday’s closing prices.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 71, which puts it in the top 28% 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.

To follow MA in the coming trading sessions, be sure to utilize Zacks.com.

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