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

MasterCard (MA) closed at $356.77 in the latest trading session, marking a -0.39% move from the prior day.

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This story originally appeared on Zacks

In the latest trading session, MasterCard (MA) closed at $356.77, marking a -0.39% move from the previous day. This change lagged the S&P 500's daily loss of 0.28%.

- Zacks

Prior to today's trading, shares of the processor of debit and credit card payments had gained 0.68% over the past month. This has outpaced the Business Services sector's gain of 0.62% and the S&P 500's loss of 0.56% in that time.

Investors will be hoping for strength from MA as it approaches its next earnings release. On that day, MA is projected to report earnings of $2.18 per share, which would represent year-over-year growth of 36.25%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.95 billion, up 28.91% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.11 per share and revenue of $18.77 billion, which would represent changes of +26.13% and +22.69%, respectively, from the prior year.

Any recent changes to analyst estimates for MA should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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. Within the past 30 days, our consensus EPS projection remained stagnant. MA currently has a Zacks Rank of #3 (Hold).

In terms of valuation, MA is currently trading at a Forward P/E ratio of 44.19. This represents a premium compared to its industry's average Forward P/E of 21.57.

We can also see that MA currently has a PEG ratio of 2.04. 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. The Financial Transaction Services was holding an average PEG ratio of 1.3 at yesterday's closing price.

The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 123, putting it in the top 49% 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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