November 24, 2020

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

MasterCard (MA) closed at $330.34 in the latest trading session, marking a -0.76% move from the prior day. This change lagged the S&P 500’s daily gain of 0.05%. Elsewhere, the Dow gained 0.48%, while the tech-heavy Nasdaq lost 0.61%.

Prior to today’s trading, shares of the processor of debit and credit card payments had gained 2.05% over the past month. This has outpaced the Business Services sector’s loss of 0.65% and the S&P 500’s loss of 0.52% 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 $1.62, down 24.65% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.92 billion, down 12.2% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.56 per share and revenue of $15.59 billion. These totals would mark changes of -15.57% and -7.66%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for MA. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.19% higher. MA is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that MA has a Forward P/E ratio of 50.72 right now. For comparison, its industry has an average Forward P/E of 26.57, which means MA is trading at a premium to the group.

Meanwhile, MA’s PEG ratio is currently 2.8. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Financial Transaction Services was holding an average PEG ratio of 1.52 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 77, putting it in the top 31% 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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