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

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MasterCard (MA - Free Report) closed at $199.08 in the latest trading session, marking a +0.56% move from the prior day. This move lagged the S&P 500's daily gain of 0.63%. At the same time, the Dow added 0.68%, and the tech-heavy Nasdaq gained 0.64%.

Prior to today's trading, shares of the processor of debit and credit card payments had lost 4.94% over the past month. This has was narrower than the Business Services sector's loss of 5.79% and the S&P 500's loss of 4.95% in that time.

Investors will be hoping for strength from MA as it approaches its next earnings release, which is expected to be February 7, 2019. In that report, analysts expect MA to post earnings of $1.52 per share. This would mark year-over-year growth of 33.33%. Meanwhile, our latest consensus estimate is calling for revenue of $3.79 billion, up 14.37% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.43 per share and revenue of $14.93 billion, which would represent changes of +40.39% and +19.46%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for MA. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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. Within the past 30 days, our consensus EPS projection has moved 0.41% higher. MA currently has a Zacks Rank of #2 (Buy).

Investors should also note MA's current valuation metrics, including its Forward P/E ratio of 30.78. This represents a premium compared to its industry's average Forward P/E of 20.13.

We can also see that MA currently has a PEG ratio of 1.7. 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 1.48 based on yesterday's closing prices.

The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 55, putting it in the top 21% 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.

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




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