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

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MasterCard (MA - Free Report) closed the most recent trading day at $200.33, moving +1.31% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.54%. Elsewhere, the Dow gained 0.64%, while the tech-heavy Nasdaq added 0.95%.

Prior to today's trading, shares of the processor of debit and credit card payments had lost 0.22% over the past month. This has was narrower than the Business Services sector's loss of 5.18% and the S&P 500's loss of 4.97% in that time.

MA will be looking to display strength as it nears its next earnings release, which is expected to be February 7, 2019. The company is expected to report EPS of $1.52, up 33.33% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.79 billion, up 14.37% from the prior-year quarter.

MA's full-year Zacks Consensus Estimates are calling for earnings of $6.43 per share and revenue of $14.93 billion. These results would represent year-over-year changes of +40.39% and +19.46%, respectively.

Any recent changes to analyst estimates for MA should also be noted by investors. 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.

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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. 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 30.75 right now. This represents a premium compared to its industry's average Forward P/E of 19.03.

We can also see that MA currently has a PEG ratio of 1.69. 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 1.35 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 41, putting it in the top 16% 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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