Mastercard (NYSE:MA) Shares Down 2.5% After Analyst Downgrade

Mastercard Incorporated (NYSE:MA) fell 2.5% during mid-day trading on Thursday after Freedom Broker downgraded the stock from a buy rating to a hold rating. Freedom Broker now has a $725.00 price target on the stock, up from their previous price target of $620.00. Mastercard traded as low as $653.85 and last traded at $655.6080. 4,935,498 shares changed hands during trading, an increase of 40% from the average daily volume of 3,516,372 shares. The stock had previously closed at $672.68.

A number of other research analysts have also weighed in on MA. Piper Sandler raised their price objective on shares of Mastercard from $597.00 to $710.00 and gave the company an “overweight” rating in a research note on Friday, July 31st. The Goldman Sachs Group reissued a “buy” rating and set a $701.00 target price (up from $674.00) on shares of Mastercard in a research report on Thursday, July 30th. Loop Capital upped their target price on shares of Mastercard from $631.00 to $647.00 and gave the stock a “buy” rating in a report on Friday, July 31st. Raymond James Financial reaffirmed an “outperform” rating and issued a $632.00 price target (up from $609.00) on shares of Mastercard in a research report on Friday, July 31st. Finally, Dbs Bank upgraded Mastercard to a “moderate buy” rating in a research note on Friday, August 21st. Two investment analysts have rated the stock with a Strong Buy rating, thirty have given a Buy rating, two have assigned a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat, Mastercard presently has a consensus rating of “Moderate Buy” and an average target price of $704.62.

Insider Buying and Selling

In other Mastercard news, insider Sachin Mehra sold 7,444 shares of the company’s stock in a transaction dated Wednesday, August 19th. The shares were sold at an average price of $577.13, for a total value of $4,296,155.72. Following the completion of the sale, the insider directly owned 40,916 shares of the company’s stock, valued at approximately $23,613,851.08. This represents a 15.39% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Julius Genachowski sold 371 shares of the stock in a transaction dated Friday, October 9th. The shares were sold at an average price of $585.01, for a total transaction of $217,038.71. Following the completion of the sale, the director owned 8,607 shares of the company’s stock, valued at approximately $5,035,181.07. This trade represents a 4.13% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders have sold 25,403 shares of company stock worth $15,428,736. 0.09% of the stock is owned by insiders.

Key Headlines Impacting Mastercard

Here are the key news stories impacting Mastercard this week:

• Positive Sentiment: Q3 results beat expectations: revenue rose 14% year over year to $9.81 billion and adjusted EPS increased 21.2%. Services revenue grew 19%, although higher incentives were flagged as a concern. Mastercard’s 19% Services Growth Steals the Q3 Show: Buy or Hold MA?
• Positive Sentiment: Truist raised its price target to $735 and maintained a Buy rating, signaling potential upside in its view. Truist Financial rating information
• Negative Sentiment: Freedom Broker downgraded MA from Buy to Hold, despite lifting its target to $725. The mixed call may temper enthusiasm after the stock’s recent rally. Freedom Broker rating information
• Negative Sentiment: Valuation is a key risk: coverage notes the recent rally has outpaced changes in earnings estimates, leaving less room for disappointment. Rising incentives could also weigh on margins. Mastercard Stock Rose 22% in a Month. Here’s What Its Price Now Assumes
• Negative Sentiment: Visa and Mastercard face additional collective claims in the UK over card fees, adding potential legal and financial uncertainty. Visa and Mastercard face additional £5bn collective claims over card fees
• Neutral Sentiment: The CFO sold about $2.77 million of MA shares. The sale may attract attention, but the report provides no context on its purpose. Mastercard CFO stock sale

Institutional Investors Weigh In On Mastercard

Hedge funds have recently made changes to their positions in the business. State Street Corp boosted its stake in Mastercard by 1.3% in the second quarter. State Street Corp now owns 36,964,305 shares of the credit services provider’s stock valued at $18,984,867,000 after acquiring an additional 486,283 shares during the last quarter. Jennison Associates LLC grew its holdings in Mastercard by 10.4% during the first quarter. Jennison Associates LLC now owns 5,123,041 shares of the credit services provider’s stock valued at $2,559,779,000 after purchasing an additional 480,725 shares during the period. Fisher Asset Management LLC grew its holdings in Mastercard by 0.7% during the third quarter. Fisher Asset Management LLC now owns 4,386,119 shares of the credit services provider’s stock valued at $2,418,813,000 after purchasing an additional 28,834 shares during the period. Dimensional Fund Advisors LP increased its position in Mastercard by 1.0% in the first quarter. Dimensional Fund Advisors LP now owns 4,225,359 shares of the credit services provider’s stock worth $2,111,216,000 after buying an additional 42,871 shares during the last quarter. Finally, Amundi increased its position in Mastercard by 5.8% in the second quarter. Amundi now owns 3,626,416 shares of the credit services provider’s stock worth $1,862,527,000 after buying an additional 199,424 shares during the last quarter. 97.28% of the stock is currently owned by institutional investors.

Mastercard Stock Down 0.4%

The firm has a market capitalization of $572.43 billion, a PE ratio of 34.18, a P/E/G ratio of 1.86 and a beta of 0.78. The stock has a 50-day simple moving average of $593.15 and a 200-day simple moving average of $539.12. The company has a quick ratio of 1.01, a current ratio of 1.01 and a debt-to-equity ratio of 3.29.

Mastercard (NYSE:MA) last posted its quarterly earnings results on Thursday, October 29th. The credit services provider reported $5.31 earnings per share for the quarter, topping the consensus estimate of $5.17 by $0.14. Mastercard had a return on equity of 260.86% and a net margin of 46.73%. The company had revenue of $9.81 billion during the quarter, compared to the consensus estimate of $9.66 billion. During the same quarter in the prior year, the company earned $4.38 EPS. The firm’s quarterly revenue was up 14.0% compared to the same quarter last year. Analysts forecast that Mastercard Incorporated will post 20.00 EPS for the current year.

Mastercard Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Monday, November 9th. Investors of record on Friday, October 9th will be paid a dividend of $0.87 per share. This represents a $3.48 dividend on an annualized basis and a dividend yield of 0.5%. The ex-dividend date is Friday, October 9th. Mastercard’s dividend payout ratio is presently 18.20%.

About Mastercard

Mastercard Incorporated is a global payments technology company that operates a network connecting consumers, merchants, financial institutions, businesses and governments. Its network supports electronic payments, including transactions made with Mastercard-branded credit, debit and prepaid cards, as well as digital payment methods.

The company provides technology for authorizing, clearing and settling transactions. It also offers services related to cybersecurity, identity verification, data analytics, fraud prevention and payment consulting.