Mastercard (MA) Lifted to “Buy” at Zacks Investment Research

Mastercard (NYSE:MA) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a research report issued to clients and investors on Thursday. The brokerage currently has a $235.00 target price on the credit services provider’s stock. Zacks Investment Research‘s price objective would suggest a potential upside of 19.59% from the company’s current price.

According to Zacks, “Mastercard’s stock has outperformed the industry in a year's time. The stock have witnessed its 2018 move upward over the past 60 days. The company is poised for growth, given its solid market position, ongoing expansion and digital initiatives plus significant opportunities from the secular shift toward electronic payments. Its numerous acquisitions have aided revenue growth. The company is gaining from increase in switched transactions, cross-border volume and gross dollar volume from higher spending. However, escalating costs will put pressure on the company’s bottom line. Also, Mastercard has been incurring quite high levels of costs under rebates and incentives, which remains a concern.”

Other research analysts have also issued reports about the company. Wells Fargo & Co upped their target price on Mastercard from $230.00 to $250.00 and gave the company an “outperform” rating in a research note on Monday, October 1st. Goldman Sachs Group upgraded Mastercard from a “buy” rating to a “conviction-buy” rating in a research note on Monday, September 17th. BMO Capital Markets began coverage on Mastercard in a research note on Wednesday, September 26th. They issued an “outperform” rating and a $238.00 target price for the company. Barclays began coverage on Mastercard in a research note on Wednesday, November 14th. They issued an “overweight” rating and a $240.00 target price for the company. Finally, Royal Bank of Canada upped their target price on Mastercard from $223.00 to $232.00 and gave the company an “outperform” rating in a research note on Tuesday, September 11th. They noted that the move was a valuation call. Three equities research analysts have rated the stock with a hold rating, twenty-six have assigned a buy rating and two have assigned a strong buy rating to the company’s stock. The stock currently has a consensus rating of “Buy” and a consensus target price of $221.28.

MA opened at $196.50 on Thursday. Mastercard has a twelve month low of $149.17 and a twelve month high of $225.35. The company has a debt-to-equity ratio of 1.01, a current ratio of 1.55 and a quick ratio of 1.55. The company has a market capitalization of $209.65 billion, a P/E ratio of 42.90, a P/E/G ratio of 1.74 and a beta of 1.21.

Mastercard (NYSE:MA) last posted its earnings results on Tuesday, October 30th. The credit services provider reported $1.78 earnings per share for the quarter, topping the Thomson Reuters’ consensus estimate of $1.68 by $0.10. Mastercard had a return on equity of 114.58% and a net margin of 35.88%. The firm had revenue of $3.90 billion during the quarter, compared to analyst estimates of $3.86 billion. During the same period in the previous year, the company earned $1.34 EPS. The company’s revenue for the quarter was up 14.7% on a year-over-year basis. Equities analysts expect that Mastercard will post 6.43 earnings per share for the current year.

Mastercard declared that its board has authorized a stock repurchase plan on Tuesday, December 4th that authorizes the company to repurchase $6.50 million in outstanding shares. This repurchase authorization authorizes the credit services provider to buy shares of its stock through open market purchases. Shares repurchase plans are usually a sign that the company’s management believes its stock is undervalued.

In related news, Director Richard K. Davis bought 2,475 shares of the business’s stock in a transaction on Friday, November 2nd. The shares were purchased at an average price of $196.37 per share, with a total value of $486,015.75. Following the completion of the purchase, the director now owns 3,468 shares of the company’s stock, valued at approximately $681,011.16. The acquisition was disclosed in a filing with the SEC, which is available at this hyperlink. Corporate insiders own 0.32% of the company’s stock.

A number of large investors have recently added to or reduced their stakes in the business. Capital World Investors raised its position in shares of Mastercard by 18.4% during the third quarter. Capital World Investors now owns 19,136,297 shares of the credit services provider’s stock worth $4,259,931,000 after purchasing an additional 2,976,127 shares during the period. FMR LLC raised its position in shares of Mastercard by 6.0% during the second quarter. FMR LLC now owns 39,120,141 shares of the credit services provider’s stock worth $7,687,891,000 after purchasing an additional 2,229,947 shares during the period. Capital Research Global Investors raised its position in shares of Mastercard by 10.5% during the third quarter. Capital Research Global Investors now owns 19,448,504 shares of the credit services provider’s stock worth $4,329,431,000 after purchasing an additional 1,846,753 shares during the period. Rehmann Capital Advisory Group raised its position in shares of Mastercard by 22,078.6% during the third quarter. Rehmann Capital Advisory Group now owns 1,820,194 shares of the credit services provider’s stock worth $8,176,000 after purchasing an additional 1,811,987 shares during the period. Finally, Morgan Stanley raised its position in shares of Mastercard by 8.1% during the third quarter. Morgan Stanley now owns 14,071,425 shares of the credit services provider’s stock worth $3,132,440,000 after purchasing an additional 1,058,341 shares during the period. 74.84% of the stock is currently owned by hedge funds and other institutional investors.

About Mastercard

Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. It facilitates the processing of payment transactions, including authorization, clearing, and settlement, as well as delivers related products and services.

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