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Mastercard (MA) SpendingPulse Expects a Rise in Holiday Spending

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Mastercard Incorporated’s (MA - Free Report) marketing intelligence arm Mastercard SpendingPulse announced that U.S. retail sales, excluding automotive, are likely to witness a 3.7% year-over-year jump this holiday season. Last year, it recorded a growth rate of 7.6% for the period between Nov 1 and Dec 24 as steep discounts attracted consumers despite inflationary pressures.

While pent-up demand, excess savings and rising wages enabled consumers to show resilience last year, this year, a rebalancing act is expected across sectors, categories and channels. The company expects consumers to be more “selective and value-focused,” keeping in line with tightening budgets and macroeconomic trends in a world full of choices.

Let’s delve deeper.

MA expects e-commerce to rise 6.7% year over year in the 2023 holiday season compared with the 10.6% witnessed last year. In-store sales growth is anticipated to be 2.9% this time compared with the last holiday season’s 6.8%. Omnichannel shopping habits are likely to play a major role this holiday season.

Last season, electronic sales declined 5.3% year over year, which is expected to see a turnaround this year, in the form of a 6% rise. The growing use of digital workspaces and consumers upgrading their gadgets are likely to drive this season’s electronic sales growth.

With decreasing COVID-related barriers, in-person dining drove last holiday season’s restaurant sales by a staggering 15.1%. The momentum is likely to continue this year with a 5.4% year-over-year increase. However, jewelry sales fell 5.4% last holiday season and are expected to witness a 0.3% decline this time.

Price Movement

Shares of Mastercard have jumped 32% in the past year compared with the industry’s 19.2% growth.

Zacks Investment Research
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Zacks Rank & Key Picks

Mastercard currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Business Services sector are Shift4 Payments, Inc. (FOUR - Free Report) , Paysafe Limited (PSFE - Free Report) and FirstCash Holdings, Inc. (FCFS - Free Report) . While Shift4 Payments currently sports a Zacks Rank #1 (Strong Buy), Paysafe and FirstCash carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Shift4 Payments’ current-year bottom line suggests 93.5% year-over-year growth. Based in Allentown, PA, FOUR beat earnings estimates in all the past four quarters, with an average surprise of 21.9%.

The Zacks Consensus Estimate for Paysafe’s current year bottom line suggests 5.8% year-over-year growth. Headquartered in London, PSFE beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 154%.

The Zacks Consensus Estimate for FirstCash’s current year earnings indicates a 6.7% year-over-year increase. Fort Worth, TX-based FCFS beat earnings estimates in all the past four quarters, with an average surprise of 7.3%.

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