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MasterCard (MA) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

MasterCard (MA) closed the most recent trading day at $299.91, moving -1.85% from the previous trading session. This move lagged the S&P 500's daily loss of 1.08%. Elsewhere, the Dow lost 1.51%, while the tech-heavy Nasdaq lost 0.86%.

Coming into today, shares of the processor of debit and credit card payments had lost 1.56% in the past month. In that same time, the Business Services sector lost 1.26%, while the S&P 500 lost 0.3%.

Investors will be hoping for strength from MA as it approaches its next earnings release. The company is expected to report EPS of $1.13, down 40.21% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.22 billion, down 21.81% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.44 per share and revenue of $15.51 billion, which would represent changes of -17.12% and -8.14%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for MA. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.48% higher. MA currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MA has a Forward P/E ratio of 47.42 right now. For comparison, its industry has an average Forward P/E of 27.41, which means MA is trading at a premium to the group.

Investors should also note that MA has a PEG ratio of 3.7 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MA's industry had an average PEG ratio of 1.87 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 67, putting it in the top 27% 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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