In the latest trading session, MasterCard (MA – Free Report) closed at $382.16, marking a -1.04% move from the previous day. This move lagged the S&P 500’s daily loss of 0.53%.
Prior to today’s trading, shares of the processor of debit and credit card payments had gained 5.22% over the past month. This has outpaced the Business Services sector’s loss of 2.36% and lagged the S&P 500’s gain of 5.72% in that time.
Investors will be hoping for strength from MA as it approaches its next earnings release, which is expected to be April 29, 2021. The company is expected to report EPS of $1.57, down 14.21% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.98 billion, down 0.66% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.99 per share and revenue of $18.08 billion. These totals would mark changes of +24.26% and +18.16%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for MA. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.06% higher. MA currently has a Zacks Rank of #3 (Hold).
In terms of valuation, MA is currently trading at a Forward P/E ratio of 48.35. For comparison, its industry has an average Forward P/E of 25.69, which means MA is trading at a premium to the group.
Also, we should mention that MA has a PEG ratio of 2.66. 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 2.28 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 222, which puts it in the bottom 13% 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.
To follow MA in the coming trading sessions, be sure to utilize Zacks.com.