Earlier today, credit card giant Mastercard (MA) released its preliminary Mastercard SpendingPulse report for the holiday shopping season. In 2024, U.S. retail sales saw a 3.8% boost compared to last year, with online shopping leading the charge with 6.7% year-over-year growth. It was clear that consumers were on the hunt for value as they took advantage of deals during major promotional periods like Black Friday.
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As Mastercard’s chief economist, Michelle Meyer, puts it, this spending spree is a testament to the strength of the U.S. consumer, which is the result of a healthy job market and rising household wealth.
As you might expect, some retail categories performed better than others. Dining out was the big winner when it came to experiences, thanks to a 6.3% boost in restaurant spending. On the other hand, when it came to physical goods, apparel, jewelry, and electronics were among the top performers. Interestingly, certain cities turned out to be digital shopping hubs, with Tampa, Phoenix, and Minneapolis seeing double-digit growth in e-commerce sales.
Online Sales Outpaced In-Store Sales
But perhaps the biggest takeaway from the report is how online sales outpaced in-store sales as consumers increasingly opted for convenience. Indeed, e-commerce sales grew by 6.7%, as previously mentioned, while in-store shopping saw a 2.9% increase.
Apparel was a particular standout in e-commerce growth, and retailers took notice by offering promotions and managing their online and offline channels to capture consumer attention, according to the senior advisor for Mastercard, Steve Sadove.
What Is the Target Price for MA Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MA stock based on 22 Buys, two Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 27% rally in its share price over the past year, the average MA price target of $580 per share implies 8.15% upside potential.
