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MasterCard (MA) Falls More Steeply Than Broader Market: What Investors Need to Know

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MasterCard (MA - Free Report) ended the recent trading session at $469.77, demonstrating a -1.6% swing from the preceding day's closing price. This change lagged the S&P 500's daily loss of 1.23%. On the other hand, the Dow registered a loss of 1.36%, and the technology-centric Nasdaq decreased by 1.4%.

Shares of the processor of debit and credit card payments witnessed a gain of 1.23% over the previous month, beating the performance of the Business Services sector with its loss of 1.22% and underperforming the S&P 500's gain of 1.61%.

The investment community will be closely monitoring the performance of MasterCard in its forthcoming earnings report. The company is predicted to post an EPS of $3.22, indicating a 15% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $6.34 billion, showing a 10.23% escalation compared to the year-ago quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.35 per share and revenue of $28.12 billion. These totals would mark changes of +17.05% and +12.05%, respectively, from last year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for MasterCard. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.1% decrease. MasterCard presently features a Zacks Rank of #3 (Hold).

With respect to valuation, MasterCard is currently being traded at a Forward P/E ratio of 33.27. For comparison, its industry has an average Forward P/E of 15.25, which means MasterCard is trading at a premium to the group.

We can also see that MA currently has a PEG ratio of 1.81. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Financial Transaction Services stocks are, on average, holding a PEG ratio of 1.21 based on yesterday's closing prices.

The Financial Transaction Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 41, this industry ranks in the top 17% of all industries, numbering over 250.

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.

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