Mastercard Posts Upbeat Q3 Results; Street Says Buy

Financial services corporation Mastercard Inc. (MA) has reported better-than-expected results for the third quarter ended September 30, 2021. The robust results were driven by strong growth in net revenues.

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Following the earnings, shares of the company declined marginally to close at $333 on Thursday.

Mastercard recorded quarterly net revenues of $5 billion, up 30% year-over-year. The figure also topped the consensus estimate of $4.95 billion. The growth in net revenues was primarily driven by the gross dollar volume growth of 20% from the prior year, on a local currency basis, to $2 trillion. Cross-border volume growth and switched transactions were up 52% (on a local currency basis) and 25%, respectively.

The company reported quarterly earnings per share (EPS) of $2.37, a year-over-year growth of 48%. Moreover, the figure surpassed the consensus estimate of $2.19 per share.

During the third quarter, Mastercard repurchased about 4.3 million shares for roughly $1.6 billion and paid $434 million in dividends.

The CEO of Mastercard, Michael Miebach, said, “We saw continued momentum across the business as we delivered strong revenue and earnings growth again this quarter. Our performance was driven by the execution of our strategy, healthy domestic spending and solid growth in cross-border spending which has recently returned to pre-pandemic levels.” (See Mastercard stock chart on TipRanks)

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On October 28, Mizuho Securities analyst Dan Dolev reiterated a Buy rating on the stock. The analyst’s price target of $450 implies upside potential of 35.1% from current levels.

Consensus among analysts is a Strong Buy based on 13 Buys and 1 Hold. The average Mastercard price target of $437.64 implies upside potential of 31.4% from current levels. Shares have gained 13.6% over the past year.