It uses the current share price and divides it by the total earnings per share for the last 12 months. Market capitalization of the Mastercard Inc. is the total market value of all issued shares of a company. It is calculated by the formula
multiplying the number of MA shares in the company outstanding by the market price of one share. In terms of its outperformance versus Visa, Mastercard’s gross margin is slightly higher at 100%, versus Visa’s at 97.6%. Additionally, Mastercard has issued more credit cards than Visa, and its cards grew at a much faster rate than Visa’s, at 25% versus Visa’s 4%.
- Forward P/E uses projections of future earnings instead of final numbers.
- Visa is trading at a trailing P/E of about 31.8 times, versus Mastercard’s current P/E of around 34.3.
- Mastercard has the means to quickly pay off any of its variable-rate debt should interest rates quickly soar.
- MasterCard Worldwide or MasterCard Incorporated is a multinational financial corporation, a large international payment system.
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it fxtm broker reviews has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through September 4, 2023. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return.
Royal Bank of Canada has the lowest price target set, forecasting a price of $404.00 for Mastercard in the next year. Mastercard has a Strong Buy consensus rating based on 21 Buys, two Holds, and zero Sell ratings assigned over the last three months. At $423.18, the average review the only investment guide you’ll ever need implies upside potential of 20.35%.
Stock Ratings Reports and Tools
This chart shows the closing price for MA for the last year in relation to the current analyst high, average, and low pricetarget. Enter your email address below to receive the latest headlines and analysts’ recommendations for your stocks with our free daily email newsletter. This trend accelerated during the pandemic, as germophobic consumers shied away from touching cash and preferred to pay for things with credit and debit cards instead. With the inflation rate reaching a near 40-year high of 7% in December, it’s really an understatement to say that inflation is on the minds of economists, investors, and consumers.
- Mastercard stock forecasts are adjusted once a day based on the closing price of the previous trading day.
- This should also act as a catalyst to drive Mastercard’s revenue and earnings higher in 2022.
- Although Visa beats Mastercard slightly in some areas, Mastercard’s fundamentals are still extraordinarily attractive.
Fortunately, Mastercard is built to do especially well when inflation ramps up because of both its business model and fortress-like balance sheet. Mastercard earns revenue based on the dollar volume of transactions and number of transactions that the company’s payment network completes for financial institutions that issue cards. Dividend Per Share is a financial indicator equal to the ratio of the company’s net profit available for distribution to the annual average of ordinary shares. MasterCard Worldwide or MasterCard Incorporated is a multinational financial corporation, a large international payment system.
Investors need to be mindful when constructing their portfolios to make sure that they can endure all economic environments, including high inflationary periods. Here’s what growth investors need to know about Mastercard for this year. Splitting of shares is an increase in the number of securities of the issuing company circulating on the market due to a decrease in their value at constant capitalization. Investors may need to batten down the hatches, so to speak, as both stocks could face setbacks in the event of a recession.
Thus, manageable inflation and the resulting increase in the costs of goods and services will be more of a benefit than detriment to the company’s revenue and profitability in the future. This helps to explain why analysts are forecasting a 20% jump in Mastercard’s revenue this year to $22.5 billion. And this higher revenue base should propel the company’s non-GAAP (adjusted) earnings per share (EPS) to $10.51, a 27% gain. 23 Wall Street analysts have set twelve-month price targets for Mastercard in the last year. Their average twelve-month price target is $449.52, suggesting a possible upside of 12.9%. JPMorgan Chase & Co. has the highest price target set, predicting MA will reach $496.00 in the next twelve months.
Analysts begin to worry about the growth of credit cards.
To see all exchange delays and terms of use please see Barchart’s disclaimer. Mastercard’s (MA -0.47%) long streak of outperforming the S&P 500 came to an end last year. Shares of the mega-cap payments processor rose just 0.7% in 2021, which significantly lagged the S&P 500’s 26.9% gain.
What is the current consensus analyst rating for Mastercard?
However, even after the depths of the Great Financial Crisis, Visa and Mastercard shares were both quick to recover. Over the long run, it’s unlikely that you could go wrong with either Visa or Mastercard, making them both look like long-term buy-and-holds. However, investors who can pick only one due to the size and required diversification of their portfolio may want to choose Visa in the near term.
Company Summary
This is because the company produced $10.8 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA) in the last 12 months. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. Mastercard’s P/E multiple stands at 34.3, versus its mean ratio of 43.2 since April 2018, suggesting more room for upside. Further, its P/S multiple of 15.2 times compares to its mean multiple of 18 times over the same timeframe.
On the balance sheet side of the equation, Mastercard also won’t be negatively affected by the series of interest rate increases the Federal Reserve is planning this year to tame inflation. That’s because Mastercard’s net debt is only $6.9 billion ($13.9 billion in long-term debt minus $6.9 billion in cash and investments). Mastercard has the means to quickly pay off any of its variable-rate debt should interest rates quickly soar.
Analyst Recommendations on MasterCard, Inc.
However, Mastercard has a larger mix of international credit cards, which might serve as a headwind due to the potential for slower growth in some of those markets. While both companies exhibit attractive fundamentals and have been untouched by the banking crisis, Visa appears to look slightly better in the near term. For example, Visa enjoys a higher operating margin of 67% and a higher net income margin of 50.3% for the last 12 months. The company also has a higher free cash flow margin of 58.8% for the last 12 months.
The good news for Mastercard’s shareholders is that the stock looks set to return to its winning ways in 2022. The stock is up a bit year to date, which is better than the 5% decline in the S&P 500. Visa is also much larger in terms of revenue, at kvb forex $30.2 billion for the last 12 months. Visa’s debt-to-equity ratio of 55.5% is also far better than Mastercard’s 232%, which could be critical in the event of a recession. The technique has proven to be very useful for finding positive surprises.
What is the Price Target for V Stock?
The Mastercard stock prediction results are shown below and presented as a graph, table and text information. For Mastercard stocks, the 200-day moving average is the resistance level today. With two companies that are basically a duopoly and so nearly identical in the types of services offered, a deep dive is in order. At first glance, Mastercard is trading at a meaningfully higher price-to-earnings (P/E) ratio, but there’s more to consider. Mastercard currently has 2 hold ratings and 17 buy ratings from Wall Street analysts. The stock has a consensus analyst rating of “Moderate Buy.” View the latest ratings for MA.