What To Expect From Mastercard Stock?

+2.39%
Upside
460
Market
471
Trefis
MA: Mastercard logo
MA
Mastercard

Mastercard’s stock (NYSE: MA) has gained approximately 7% YTD as compared to the 8% rise in the S&P500 index over the same period. Further, at its current price of $373 per share, it is trading 13% below its fair value of $427 – Trefis’ estimate for Mastercard’s valuationThe company, a leading global payments solutions provider, outperformed the consensus estimates in the fourth quarter of 2022. It reported net revenues of $5.82 billion – up 12% y-o-y. The growth was driven by a 31% jump in the cross-border volume, followed by an 8% increase in the gross dollar volume (GDV) and an 8% rise in the switched transactions. On the cost front, the operating expenses increased by 10% in the quarter. Overall, the firm reported a 6% y-o-y improvement in the net income to $2.5 billion. 

The total revenues grew 18% y-o-y to $22.2 billion in FY2022. It was driven by a 45% jump in cross-border volumes, followed by a 12% rise in gross-dollar volume and the number of switched transactions. That said, the positive effect of revenue growth was partially offset by an unfavorable decrease in total other income from $225 million to -$532 million. All in all, the net income increased 14% y-o-y to $9.9 billion.

Moving forward, we expect the revenue to continue its growth trajectory in Q1 2023. Notably, the consensus estimates for Q1 revenues and earnings are $5.64 billion and $2.71 respectively. Altogether, Mastercard’s revenues are forecast to touch $25.2 billion in FY2023. Additionally, MA’s adjusted net income margin is expected to see some improvement in the year, leading to a net income of $11.5 billion. This coupled with an annual EPS of $12.04 and a P/E multiple of just above 35x will lead to a valuation of $427.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Apr 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 MA Return 3% 7% 273%
 S&P 500 Return 1% 8% 85%
 Trefis Multi-Strategy Portfolio 2% 10% 246%
Relevant Articles
  1. Mastercard Stock Gained 20% In The Last Six Months, What To Expect From Q1 Results?
  2. Up 36% Since The Start Of 2023, Where Is Mastercard Stock Headed?
  3. Where Is Mastercard Stock Headed?
  4. Where Is Mastercard Stock Headed?
  5. Mastercard Stock Likely To Top The Earnings Consensus In Q4
  6. Is Mastercard Stock Fairly Priced?

[1] Month-to-date and year-to-date as of 4/18/2023
[2] Cumulative total returns since the end of 2016

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates