Close

Q3 Preview: MasterCard (MA) Looks to Charge Forward After Strong Period for the Stock

November 1, 2010 2:47 PM EDT
Get Alerts MA Hot Sheet
Price: $481.57 +0.76%

Rating Summary:
    38 Buy, 5 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
Join SI Premium – FREE
Shares of MasterCard Inc. (NYSE: MA) are down $0.48 to $239.58 in midday market movement on Monday ahead of the company's third-quarter earnings release scheduled for Tuesday before the opening bell.

The credit card payment solutions company is expected by analysts to report earnings of $3.54 per share on revenue of $1.41 billion.

In the second quarter, MasterCard reported earnings of $3.49 per share, beating the analyst estimate of $3.33 per share. The company reported second-quarter revenue of $1.37 billion, slightly missing the consensus of $1.38 billion.

Since the start of the third quarter, shares of MasterCard are up $29.33 or 13.96 percent. Year-to-date the stock is down $16.61 or 6.49 percent.

A valuation shows that MasterCard is going for a forward P/E of 18.94x full year 2010 estimates.

Data from Bloomberg shows that 31 analysts have a Buy rating on the stock, 4 have a Hold and 1 has a Sell. The average analyst price target on MasterCard is $275 with a target range of $260 to $330.

Analyst Comments

JPMorgan maintains an Overweight rating on MasterCard with a price target of $315.

JPMorgan analyst says, "There appears to be increased comfort that debit interchange reductions could be less damaging than originally feared. As Fed clarity improves, we’re optimistic that MA can trade closer to its growth rate."

Duncan Williams maintains a Strong Buy rating on MasterCard with a price target of $300.

Duncan Williams analyst says, "With the exception of acquisition costs related to DataCash and a potentially lower tax rate, the 3Q results should be relatively clean when compared to 2Q since there were no significant price increases or other major changes in the business that we are aware of. Similar to Visa (NYSE: V), we expect buybacks to increasingly become a more significant driver of EPS growth for MasterCard. In September, the company announced a new $1bn buyback program. This could be a potential source of upside relative to our estimates."


Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Analyst Comments, Insiders' Blog

Related Entities

JPMorgan, Raising Prices, Earnings