Strong Consumer Confidence Should Results in a Solid Mastercard (MA) Earnings Report

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Credit card company Mastercard (MA) will release its second-quarter numbers July 30. Mastercard will report before the market open with the consensus calling for earnings of $1.82 per share, up from $1.66 during the same period last year. MA stock is up 49% on the year.

Technical Analysis

MA stock was recently trading at $281.25 down $0.87 from its 12-month high and $109.36 above its 12-month low. InvestorsObserver’s Stock Score Report gives MA a 91 long-term technical score and a 89 short-term technical score. The stock has recent support above $260 and recent resistance below $281. Of the 23 analysts who cover the stock 21 rate it Strong Buy, 1 rate it Buy, 1 rate it Hold, 0 rate it Sell, and 0 rate it Strong Sell, MA gets a score of 85 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

Overall economic conditions remain very favorable for credit card companies, and American Express (AXP) has already reported better than expected numbers on both its top and bottom line this earnings season. The economy remains strong, and low unemployment and record high stock market has boosted consumer confidence and spending. Not only are Americans spending, they are carrying record level credit balanaces, which is the ideal situation for credit card companies such as Mastercard (MA). Over the last five years the company has grown profits at an annual rate of 19.2%, and analysts see additional earnings growth of 17% per annum over the next five years. If the company is able to hit the strong forecast the stock should trend higher, despite shares trading at 31 times future earnings. The valuation does price the stock for perfection, so Wall Street will not want to see any negative surprises. MA is trading just pennies under its all-time high at $281.25 and analysts have an average price target of $292.19. The street expects to see Mastercard post a positive earnings surprise with a whisper number of $1.85 for the quarter.

About Mastercard Incorporated

Mastercard is the second- largest payment processor in the world and processed $4.3 trillion in purchase transactions in 2018. Mastercard operates in over 200 countries and processes transactions in over 150 currencies.

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