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

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MasterCard (MA - Free Report) closed at $239.89 in the latest trading session, marking a +0.31% move from the prior day. This change outpaced the S&P 500's 0.05% gain on the day. Meanwhile, the Dow gained 0.26%, and the Nasdaq, a tech-heavy index, added 0.3%.

Coming into today, shares of the processor of debit and credit card payments had gained 3.8% in the past month. In that same time, the Business Services sector gained 3.58%, while the S&P 500 gained 3.08%.

MA will be looking to display strength as it nears its next earnings release, which is expected to be April 30, 2019. In that report, analysts expect MA to post earnings of $1.67 per share. This would mark year-over-year growth of 11.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.88 billion, up 8.47% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.56 per share and revenue of $16.78 billion, which would represent changes of +16.49% and +12.23%, respectively, from the prior year.

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 has moved 0.14% higher within the past month. MA is currently a Zacks Rank #3 (Hold).

In terms of valuation, MA is currently trading at a Forward P/E ratio of 31.63. Its industry sports an average Forward P/E of 21.97, so we one might conclude that MA is trading at a premium comparatively.

Also, we should mention that MA has a PEG ratio of 1.9. 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. Financial Transaction Services stocks are, on average, holding a PEG ratio of 1.69 based on yesterday's closing prices.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 181, which puts it in the bottom 30% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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