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

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MasterCard (MA - Free Report) closed at $348.69 in the latest trading session, marking a +1.6% move from the prior day. This move outpaced the S&P 500's daily gain of 0.41%.

Heading into today, shares of the processor of debit and credit card payments had lost 0.44% over the past month, outpacing the Business Services sector's loss of 8.26% and the S&P 500's loss of 4.08% in that time.

Investors will be hoping for strength from MA as it approaches its next earnings release. On that day, MA is projected to report earnings of $2.18 per share, which would represent year-over-year growth of 36.25%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.95 billion, up 29.12% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.11 per share and revenue of $18.81 billion, which would represent changes of +26.13% and +22.9%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for MA. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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, 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 0.01% higher within the past month. MA is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that MA has a Forward P/E ratio of 42.34 right now. For comparison, its industry has an average Forward P/E of 21.01, which means MA is trading at a premium to the group.

It is also worth noting that MA currently has a PEG ratio of 1.96. 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 1.28 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 86, which puts it in the top 34% 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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