MasterCard (MA) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

MasterCard (MA) closed the most recent trading day at $324.98, moving +0.21% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.11%. Meanwhile, the Dow lost 0.09%, and the Nasdaq, a tech-heavy index, added 0.2%.

Prior to today's trading, shares of the processor of debit and credit card payments had gained 9.02% over the past month. This has outpaced the Business Services sector's gain of 4.03% and the S&P 500's gain of 3.25% in that time.

Investors will be hoping for strength from MA as it approaches its next earnings release, which is expected to be January 29, 2020. In that report, analysts expect MA to post earnings of $1.87 per share. This would mark year-over-year growth of 20.65%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.40 billion, up 15.6% from the year-ago period.

It is also important to note the recent changes to analyst estimates for MA. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about 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 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. The Zacks Consensus EPS estimate has moved 0.11% higher within the past month. MA is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, MA is currently trading at a Forward P/E ratio of 35.81. This valuation marks a premium compared to its industry's average Forward P/E of 23.52.

Investors should also note that MA has a PEG ratio of 2.23 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 1.78 as of yesterday's close.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 77, which puts it in the top 31% 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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