Mastercard Outperforms Visa In Q2; Analysts Highlight Defensive Edge In Spending Volatility

Shares of Mastercard Inc MA remained under pressure on Thursday, despite the company reporting upbeat second-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

Goldman Sachs On Mastercard

Analyst Will Nance maintained a Buy rating, while raising the price target from $519 to $540.

Mastercard reported better-than-expected quarterly results, "with lower rebates driving a net revenue beat," Nance said in a note. "Additionally, what stood out to us was the significant outperformance in U.S. debit volumes, which accelerated ~2pts adjusted for leap year, relative to Visa Inc V which was more stable sequentially," he added.

Value Added Services grew by an impressive 19%, showcasing the progress made by Mastercard, the analyst stated. Although the consumer spending environment could remain choppy, "we believe MA's print demonstrates the strong secular tailwinds MA has globally, and its ability to withstand macro volatility, making it a more defensive exposure," he further wrote.

RBC Capital Markets On Mastercard

Analyst Daniel Perlin reiterated an Outperform rating, while lifting the price target from $500 to $526.

Mastercard reported adjusted net revenues of $6.96 billion and earnings of $3.59 per share, exceeding the consensus estimates of $6.85 billion and $3.52 per share, respectively. Management increased the full-year net revenue growth forecast to low double digits, up from the previous guidance at the low end of that range, according to Perlin.

Switched volume grew 11% year-on-year in July, compared to 10% in the second quarter, the analyst stated. The company's "recently announced organizational realignment should create additional capacity for growth investments including new high cash markets like Africa," he further wrote.

Check out other analyst stock ratings.

BMO Capital Markets On Mastercard

Analyst Rufus Hone reaffirmed an Outperform rating, while raising the price target from $510 to $520.

While Visa reported slightly lower-than-expected results, Mastercard delivered "another solid quarter of double-digit revenue growth, with payment network revenue benefiting from strong cross-border fees and lower rebates & incentives," Hone said. Value Added Services grew a strong 19% year-on-year and accelerated sequentially, he added.

Mastercard aims to "redeploy resources into growth markets with high cash levels, that have a greater secular growth opportunity," the analyst stated. "In addition, MA is seeking to expand its VAS, primarily across data analytics and fraud + cybersecurity (building additional tools that leverage AI)," he further wrote.

JPMorgan On Mastercard

Analyst Tien-tsin Huang reiterated an Overweight rating and price target of $500.

Although some volume KPIs decelerated sequentially, U.S. purchase volume growth of 7% surpassed estimates, Huang said. "Mastercard continues to see a generally healthy consumer, while acknowledging an uneven macro environment globally," he added.

As part of its organizational realignment, Mastercard will record a restructuring charge in the third quarter, "as it redeploys investments toward higher growth areas," the analyst stated. "We like that the company is leaning into areas of growth, particularly as parts of the market mature," he further wrote.

MA Price Action: Shares of Mastercard were down 0.9% to $459.39 at the time of publication on Thursday.

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