Mastercard Q4 Earnings Beat Estimates, Analysts Raise Forecasts - Mastercard (NYSE:MA)

Shares of Mastercard Inc MA came under pressure in early trading on Friday, despite the company reporting upbeat fourth-quarter results.

The companyreported its quarterly results amid an exciting earnings season. Here are some key analyst takeaways.

Goldman Sachs analyst Will Nance reiterated a Buy rating, while lifting the price target from $572 to $628.
KeyBanc analyst Alex Markgraff maintained an Overweight rating, while raising the price target from $600 to $630.
RBC Capital Markets analyst Daniel Perlin reaffirmed an Outperform rating, while raising the price target from $572 to $650.
Keefe, Bruyette & Woods analyst Sanjay Sakhrani maintained an Outperform rating, while lifting the price target from $618 to $665.
Raymond James analyst John Davis reiterated an Outperform rating, while raising the price target from $614 to $640.

Check out other analyst stock ratings.

Goldman Sachs: Mastercard reported its fourth-quarter total net revenues at around $7.489 billion. The payments company beat the consensus of $7.389 billion, up 16% year-on-year in constant currency terms. Payment Network outperformed expectations, while Value-added Services and Solutions underperformed, Nance said.

While us volume trends were largely above expectations, international volumes were mixed, the analyst stated. "Shares outperformed, which we would attribute to the stronger than expected underlying revenue guide," he further wrote.

KeyBanc Capital Markets: Mastercard reported adjusted earnings of $3.82 per share, topping Street expectations of $3.70 per share, Markgraff said. Payment Network generated revenues of $4.41 billion. That’s higher than consensus of $4.28 billion. Value-Added Services and Solutions recorded revenues of $3.08 billion, missing expectations of $3.11 billion.

"Management noted that macro conditions continue to improve, underpinned by healthy consumer spending with strong labor market conditions and moderated inflation, while remaining positive on the prospect of expected global economic expansion in 2025," the analyst wrote. Mastercard's revenues and earnings in 2025 is likely to be impacted by "substantial FX and M&A-related headwinds," he further stated.

RBC Capital Markets: Mastercard's full-year net revenue guidance calls for low double-digit growth on a reported basis, versus Street expectations of 12.1%, Perlin said. "FX is expected to be a ~2% revenue headwind in the year," he added.

Trends remained strong in January, with 13% year-on-year switched volume growth and 18% year-on-year cross-border volume growth, the analyst stated. "The consumer remains healthy and incremental growth opportunities from value-added services and new payment flows stand to act as a shock-absorber to the extent the economic backdrop were to weaken," he further wrote.

Keefe, Bruyette & Woods: Mastercard's US gross dollar volume (GDV) accelerated to 9% year-on-year, from the previous quarter's 7%, "driven by resilient US consumer spending as well as strength in commercial spending," Sakhrani said. Market share gains were not the main growth driver, "strategic initiatives and new partnerships played a crucial role," he added.

Spending trends are "showing signs of improvement driven by consumer strength as well as some benefit from a pickup in crypto transactions," the analyst stated. The company's fundamentals remain "solid," and "a continuation of the accelerated spending trajectory should bode well for upside potential as we move through the year," he further wrote.

Raymond James: Mastercard's quarter to date performance has been "better than feared," Davis said. US switched volume growth accelerated to 10%, given solid holiday spending trends, he added.

"Although total cross-border volume decelerated 200 bp to +18% vs. 4Q, this is related to robust December volumes (+23%) and high-teens growth is consistent with Oct/Nov trends," the analyst wrote. The company's execution was "superb," although there is downside to consensus estimates on FX and deal-related opex, he further stated.

Price Action: Shares of Mastercard had declined by 0.58% to $562.62 at the time of publication on Friday.

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