MasterCard’s EPS to Grow 36% to $2.19 in Q3, Revenue to Jump Nearly 30%

MasterCard Inc, a global payments and technology company, is expected to report its third-quarter earnings of $2.19 per share, which represents year-over-year growth of over 36% from $1.60 per share seen in the same period a year ago.

The U.S. multinational financial services corporation would post revenue growth of about 30% to around $4.95 billion. The company has exceeded consensus earnings expectations three times in the last four quarters.

The company will report earnings on Thursday, October 28 before the market open. The better-than-expected third-quarter earnings results could help the stock recoup recent losses. MasterCard’s shares rose just 1% so far this year. It closed 0.61% higher at $360.86 on Monday.

Analyst Comments

“MasterCard (MA) is one of our preferred stocks in the space. MA’s compounding growth drivers include resilient global consumer spend growth, market share gains, and the secular shift to card from cash. As the second-largest global card network (behind Visa), MA appears well-positioned to benefit from market share gains in particular regions and consumer spending trends, which have been fairly resilient even through economic cycles,” noted James Faucette, equity analyst at Morgan Stanley.

“These trends should support double-digit revenue growth over the next few years. High incremental margins and opportunities to expand its Vocalink and B2B capabilities should enable the company to drive compounding earnings growth longer term,”

MasterCard Stock Price Forecast

Fourteen analysts who offered stock ratings for MasterCard in the last three months forecast the average price in 12 months of $437.64 with a high forecast of $482.00 and a low forecast of $385.00.

The average price target represents a 21.28% change from the last price of $360.86. From those 14 analysts, 13 rated “Buy”, one rate “Hold”, while none rate “Sell”, according to Tipranks.

“Reasons To Buy: Mastercard’s strategic acquisitions, alliances and technology upgrades, along with product-diversification and geographic-expansion initiatives augur long-term growth,” noted analysts at ZACKS Research.

“Reasons To Sell: Higher expenses, high rebates and incentives might drag the company’s margins.”

Morgan Stanley gave the base target price of $451 with a high of $526 under a bull scenario and $278 under the worst-case scenario. The firm gave an “Overweight” rating on the payments & technology company’s stock.

Several other analysts have also updated their stock outlook. Jefferies lowered the target price to $425 from $450. JPMorgan raised the price target to $430 from $427. Mizuho lifted the target price to $450 from $435.

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