Citi raises MasterCard stock price target to $650 from $584

On Friday, Citi analyst Ashwin Shirvaikar updated the firm’s outlook on MasterCard, raising its price target to $650 from the previous $584 while reiterating a Buy rating on the stock. Following the release of MasterCard’s first-quarter results, the company’s shares saw an approximate 3% increase, outpacing the S&P 500’s gain of around 0.5%. This growth extends MasterCard’s trend of outperforming the S&P, now also surpassing the index’s return on a one-year basis.

Shirvaikar noted that MasterCard’s current position suggests potential for an upward revision of its financial outlook. The recent post-earnings rise in share price reflects not only this potential but also MasterCard’s sustained solid performance into January. The company has been effectively navigating challenges, such as moving past portfolio conversions and the impact of debit partnerships with Capital One (NYSE:COF) and Discover.

The analyst highlighted MasterCard’s successful execution and its confidence to overcome these temporary challenges. Despite anticipating a phase of more gradual progress as the company addresses transitory impacts and projects lower earnings per share growth this year, Shirvaikar views MasterCard as a consistent compounder. This view is supported by the company’s robust fundamentals, including a P/E ratio of 39.51 and maintained dividend payments for 20 consecutive years, though InvestingPro analysis indicates the stock is trading at a premium relative to its near-term earnings growth potential. The company’s growth is underpinned by a variety of secular trends that span consumer payments, new transaction flows, and value-added services.

MasterCard’s stock movement following the earnings report underscores the company’s robust financial health and its ability to maintain a steady growth trajectory. As the company continues to work through temporary setbacks, its strong fundamentals suggest that it remains well-positioned in the market.

The updated price target from Citi reflects confidence in MasterCard’s strategy and its ability to leverage trends within the digital payments and services sector. As MasterCard keeps executing its business plans, investors will likely monitor the company’s progress in relation to the new price target and overall market performance. For deeper insights into MasterCard’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, along with 12 additional ProTips and extensive financial metrics available on InvestingPro.

In other recent news, MasterCard’s fourth-quarter results exceeded expectations, with a roughly 3% earnings per share beat and around a 1% revenue beat compared to Wall Street forecasts. Raymond (NSE:RYMD) James maintained an Outperform rating on MasterCard shares, raising the price target from $614.00 to $640.00. On the other hand, Seaport Global Securities downgraded MasterCard’s stock rating from ’Buy’ to ’Neutral’, citing the lack of a clear catalyst for stock value growth.

Jefferies has raised MasterCard’s price target to $660 and maintained a ’Buy’ rating. The firm’s analysis underscored the belief that MasterCard is well-positioned to benefit from the current economic environment, pointing to a robust fourth-quarter performance driven by strong consumer spending and reduced rebates and incentives.

MasterCard reported a solid revenue growth of nearly 12% for the fourth quarter and full year of 2024. Additionally, MasterCard and Visa (NYSE:V) have been implicated in a whistleblower complaint alleging involvement in money laundering associated with the website OnlyFans. The complaint suggests that both companies were aware of illicit revenue streams on the platform since at least 2021. These are among the recent developments shaping the landscape of the payment processing industry.

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