Mastercard (MA) Lowered to Hold at Zacks Investment Research

Mastercard (NYSE:MA) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a report released on Friday.

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 also recently issued reports about the stock. Royal Bank of Canada increased their target price on shares of Mastercard from $223.00 to $232.00 and gave the company an “outperform” rating in a research report on Tuesday, September 11th. They noted that the move was a valuation call. Wells Fargo & Co increased their target price on shares of Mastercard from $230.00 to $250.00 and gave the company an “outperform” rating in a research report on Monday, October 1st. BMO Capital Markets increased their target price on shares of Mastercard from $238.00 to $248.00 and gave the company an “outperform” rating in a research report on Thursday, November 1st. Credit Suisse Group increased their target price on shares of Mastercard from $210.00 to $224.00 and gave the company an “outperform” rating in a research report on Monday, October 8th. Finally, Barclays began coverage on shares of Mastercard in a research note on Wednesday, November 14th. They set an “overweight” rating and a $240.00 price target for the company. Three equities research analysts have rated the stock with a hold rating, twenty-six have given a buy rating and two have assigned a strong buy rating to the company’s stock. The company has a consensus rating of “Buy” and a consensus price target of $221.28.

Shares of NYSE MA traded down $4.83 during mid-day trading on Friday, reaching $198.16. The company had a trading volume of 112,374 shares, compared to its average volume of 4,287,109. 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 $207.06 billion, a price-to-earnings ratio of 43.29, a price-to-earnings-growth ratio of 1.72 and a beta of 1.21. Mastercard has a 52-week low of $147.51 and a 52-week high of $225.35.

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

Mastercard announced that its board has approved a stock buyback program on Tuesday, December 4th that permits the company to repurchase $6.50 million in shares. This repurchase authorization permits the credit services provider to buy shares of its stock through open market purchases. Stock repurchase programs are often a sign that the company’s board believes its shares are undervalued.

In related news, Director Richard K. Davis acquired 2,475 shares of Mastercard stock in a transaction that occurred on Friday, November 2nd. The stock was purchased at an average price of $196.37 per share, for a total transaction of $486,015.75. Following the completion of the purchase, the director now directly owns 3,468 shares of the company’s stock, valued at $681,011.16. The purchase was disclosed in a document filed with the SEC, which is available through the SEC website. 0.32% of the stock is currently owned by company insiders.

Several hedge funds and other institutional investors have recently made changes to their positions in MA. Capital World Investors lifted its stake in shares of Mastercard by 18.4% in the third quarter. Capital World Investors now owns 19,136,297 shares of the credit services provider’s stock valued at $4,259,931,000 after purchasing an additional 2,976,127 shares during the period. FMR LLC increased its holdings in Mastercard by 6.0% during the 2nd quarter. FMR LLC now owns 39,120,141 shares of the credit services provider’s stock valued at $7,687,891,000 after acquiring an additional 2,229,947 shares in the last quarter. Capital Research Global Investors increased its holdings in Mastercard by 10.5% during the 3rd quarter. Capital Research Global Investors now owns 19,448,504 shares of the credit services provider’s stock valued at $4,329,431,000 after acquiring an additional 1,846,753 shares in the last quarter. Rehmann Capital Advisory Group increased its holdings in Mastercard by 22,078.6% during the 3rd quarter. Rehmann Capital Advisory Group now owns 1,820,194 shares of the credit services provider’s stock valued at $8,176,000 after acquiring an additional 1,811,987 shares in the last quarter. Finally, Morgan Stanley increased its holdings in Mastercard by 8.1% during the 3rd quarter. Morgan Stanley now owns 14,071,425 shares of the credit services provider’s stock valued at $3,132,440,000 after acquiring an additional 1,058,341 shares in the last quarter. Hedge funds and other institutional investors own 74.84% of the company’s stock.

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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