Mastercard (MA) to Gain Traction From Promising Holiday Season
Mastercard (MA) is set to benefit from the rise in retail sales this holiday season.
Retail sales are likely to score big this holiday season with shoppers buying on both online and offline channels. Mastercard Inc. MA being one of the leading payment companies is slated to gain from increased transaction processed as cards, mobile and other electronic modes become a preferred medium of payment.
The economy opened up and people started venturing out to shops for purchases. But the comfort of online buying kept shoppers intact.
Per MastercardSpendingPulse, which measures retail sales across all payment types including cash and check, U.S. retail sales are anticipated to grow 7.4% excluding automotive and gas. Consumers are expected to spend online at even higher rates (+7.6%) than last year’s levels while in-store sales are also expected to see a rebound with 6.6% growth from the 2020 level.
The finding stated that , with early holiday shopping slated to begin in October again this year, retail sales for the “75 Days of Christmas” are anticipated to rise 6.8% excluding automotive and gas while e-commerce sales are predicted to grow 7.5% from the same-period last year’s tally.
Now whether it be online or offline sales, the preferred mode of payment remains digital and cards, which puts companies like Visa Inc. (V) and
Mastercard in a sweet spot. These companies are present at the forefront of the payments ecosystem facilitating transfer of funds from shoppers’ bank to the merchant bank. Other companies, which provide software services like Global Payments Inc. GPN and some like PayPal Holdings, Inc. PYPL and Square, Inc. SQ, which facilitate payments between parties through online transfers, stand to gain.
Talking specifically about Mastercard, the company is the second largest payment processor in the world after Visa. North America brings 35% of the company’s total revenues.
Mastercard carries a brand name that is to swear by. The company always exhibits activeness in embracing new technologies and processes to remain at the forefront of the rapidly-changing payments industry.
The company showed a remarkable operating performance in the past and will continue doing so in the future too. Its strong balance sheet, worldwide operations, allowance of crypto currency via its network, foray into open banking, buy now pay later services etc poise it well for long-term growth and therefore should be held in one’s portfolio for promising returns.
The stock has dipped 1.1% year to date compared with its industry’s decline of 14.6%. It currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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