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Mastercard Incorporated (MA), headquartered in Purchase, New York, provides transaction processing and other payment-related products and services. Valued at $449.1 billion by market cap, the company offers payment processing services for credit and debit cards, electronic cash, automated teller machines, and traveler's checks.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and MA definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the credit services industry. Mastercard boasts a powerful brand synonymous with global payments, operating in over 200 countries and processing transactions in more than 150 currencies. This strong brand equity, reflected in $9 trillion of processed volume in 2023, fosters customer loyalty and a dominant market position, bolstered by effective marketing and partnerships.
MA has slipped 2.6% from its 52-week high of $490, achieved on Mar. 21. Over the past three months, MA stock gained 6.9%, outperforming the Dow Jones Industrials Average’s ($DOWI) 5% gains during the same time frame.
In the longer term, shares of MA rose 11.9% in 2024, outperforming DOWI’s YTD gains of 8.1%. The stock climbed 16% over the past 52 weeks, underperforming DOWI’s solid 17.7% returns over the same time frame.
However, MA has traded above its 50-day and 200-day moving averages since early August, indicating a bullish trend.
MA’s mixed price action stems from a decrease in spending from lower-income consumers, resulting in reduced sales of higher-priced and non-essential items.
On Jul. 31, MA shares closed up more than 3% after reporting its Q2 results. Its adjusted EPS of $3.59 surpassed Wall Street expectations of $3.51. The company’s revenue was $7 billion, topping Wall Street forecasts of $6.9 billion. Its payment network net revenue increased 7% or 9% on a currency-neutral basis.
Mastercard’s rival, Visa Inc. (V), lagged behind the stock, with a 7% rise on a YTD basis and a 13.6% gain over the past 52 weeks.
Wall Street analysts are highly bullish on Mastercard’s prospects. The stock has a consensus “Strong Buy” rating from the 37 analysts covering it, and the mean price target of $513.38 suggests a potential upside of 7.5% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
