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MasterCard (MA) Gains As Market Dips: What You Should Know

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MasterCard (MA - Free Report) closed the most recent trading day at $203.03, moving +1.27% from the previous trading session. This change outpaced the S&P 500's 0.15% loss on the day. Meanwhile, the Dow lost 0.32%, and the Nasdaq, a tech-heavy index, added 0.42%.

Coming into today, shares of the processor of debit and credit card payments had lost 3.72% in the past month. In that same time, the Business Services sector lost 0.94%, while the S&P 500 lost 1.1%.

Wall Street will be looking for positivity from MA as it approaches its next earnings report date. This 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.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.43 per share and revenue of $14.93 billion. These totals would mark changes of +40.39% and +19.46%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for MA. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection remained stagnant. MA is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, MA is currently trading at a Forward P/E ratio of 31.17. Its industry sports an average Forward P/E of 19.31, so we one might conclude that MA is trading at a premium comparatively.

Meanwhile, MA's PEG ratio is currently 1.72. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Financial Transaction Services stocks are, on average, holding a PEG ratio of 1.36 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 28, which puts it in the top 11% 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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