Mastercard Stock Slides as Q4 Estimate Is Fairly Underwhelming, According to a Kbw Analyst

Mastercard stock was trading at $317.54 as of 12:36 PM EDT.

Mastercard’s (NYSE: MA) Q4 projection was “a little below expectations on revenue growth and is probably generating some downside in the market this morning,” KBW analyst Sanjay Sakhrani said in a note on Thursday. After falling as much as 1.7% earlier during regular trading hours, MA shares slumped 0.8% in noon trade.

Sakhrani’s prediction of +12.7% for the payment network’s Q4 expectation for net revenue growth was not met. Additionally, it came in somewhat higher than his prediction of +9%, with its expectation for Q4 adjusted operating expense growth in the low double-digits. Consumer spending was resilient and cross-border travel continued to recover, resulting in Mastercard’s (NYSE: MAQ3 earnings and revenue exceeding average analyst projections.

According to Sakhrani, the main factor behind the Q3 beat was greater net revenue, which came about as a result of higher incentives partially offsetting increased gross sales. “Volume trends were broadly in line with predictions, and intra-day quarter trends through October continue to be positive, especially for cross-border volumes (outside of Europe).”

Earnings outlook behind Mastercard stock

In its business report until October 21, cross-border volume growth was 36% Y/Y, smaller than the 44% growth it had in Q3 2022 and the 38% increase it experienced in September 2022. Cross-border travel volume increased 25%, up from 28% in September but down from 36% in Q3 when intra-Europe travel was excluded.

Switched volume growth for the month as a whole was 17% Y/Y, the same rate as September, but less than in Q3, when it increased by 18%. Switched transactions increased by 9% in October, 9% more than in September, and 9% more than in the third quarter.

In its fiscal Q4 earnings report released on Tuesday, Visa (NYSE: V) announced higher dividend payments, a new $12 billion stock buyback plan, and profitability that exceeded Street expectations. Quant 7 Capital, a SA contributor, determines the cost of making larger block purchases after examining Mastercard’s (NYSE: MA) Q3 earnings. Mastercard And Ajman Bank Introduced Touch Card For The Vision Impaired

Featured Image – Megapixl © Jbk_photography 

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