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MasterCard (MA) Gains But Lags Market: What You Should Know

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In the latest trading session, MasterCard (MA - Free Report) closed at $373.73, marking a +0.77% move from the previous day. This change lagged the S&P 500's 1.45% gain on the day. Elsewhere, the Dow gained 2.12%, while the tech-heavy Nasdaq added 5.41%.

Coming into today, shares of the processor of debit and credit card payments had lost 1.39% in the past month. In that same time, the Business Services sector gained 2.06%, while the S&P 500 gained 1.53%.

Wall Street will be looking for positivity from MasterCard as it approaches its next earnings report date. On that day, MasterCard is projected to report earnings of $2.99 per share, which would represent year-over-year growth of 16.8%. Meanwhile, our latest consensus estimate is calling for revenue of $6.19 billion, up 12.57% from the prior-year quarter.

MA's full-year Zacks Consensus Estimates are calling for earnings of $12.27 per share and revenue of $25.16 billion. These results would represent year-over-year changes of +15.21% and +13.13%, respectively.

Investors should also note any recent changes to analyst estimates for MasterCard. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate has moved 0.09% higher within the past month. MasterCard is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MasterCard has a Forward P/E ratio of 30.23 right now. For comparison, its industry has an average Forward P/E of 14.7, which means MasterCard is trading at a premium to the group.

Meanwhile, MA's PEG ratio is currently 1.73. 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. MA's industry had an average PEG ratio of 1.09 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 119, which puts it in the top 48% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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