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

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MasterCard (MA - Free Report) closed the most recent trading day at $257.72, moving +0.57% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.61%. Meanwhile, the Dow gained 0.71%, and the Nasdaq, a tech-heavy index, added 0.53%.

Heading into today, shares of the processor of debit and credit card payments had gained 4.46% over the past month, outpacing the Business Services sector's gain of 1.38% and the S&P 500's loss of 3.77% in that time.

MA will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.82, up 9.64% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.10 billion, up 11.81% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.60 per share and revenue of $16.78 billion, which would represent changes of +17.1% and +12.22%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for MA. 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. Within the past 30 days, our consensus EPS projection has moved 0.01% lower. MA currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MA has a Forward P/E ratio of 33.71 right now. This represents a premium compared to its industry's average Forward P/E of 21.6.

It is also worth noting that MA currently has a PEG ratio of 2.03. 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. The Financial Transaction Services was holding an average PEG ratio of 1.87 at yesterday's closing price.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 43, which puts it in the top 17% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

To follow MA in the coming trading sessions, be sure to utilize Zacks.com.


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