What Can We Expect From MasterCard’s Q3 Earnings

October 30th, 2017 by Trefis Team
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Mastercard

After a strong performance in the first half of the year, MasterCard (NYSE: MA) is set to report  its Q3 earnings on Tuesday, October 31st. In the first half of the year, the company reported EPS growth of 19% on revenue growth of 13%. The company grew its revenue across streams, with the strongest growth coming from transaction fees, which grew at 18%.

Over the last several years, the company has been spending heavily on marketing and promotions and rebates for customers, in order to bring in more partners into the MasterCard payment network. We expect it will realize the benefits of these efforts over the next few years, and as a result, much of its overall revenue growth will likely come from growth in transaction fees.

MasterCard has been focused on growing its portfolio of co-branding partners and improving its technology to keep pace with the rapidly evolving payments space. On the first front, it has added American Airlines, Bed, Bath & Beyond, PayPal, Walmart Canada and Axis Bank in India as partners. The company also plans to start operations in China soon, and expects significant growth in transaction volumes from access to the world’s biggest market (in PPP adjusted terms).

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Our $109 price estimate for MasterCard is around 25% below the current market price.

Please refer to our complete analysis for MasterCard

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