Mastercard Incorporated (NYSE: MA) is set to release its fourth-quarter earnings next week, with analysts forecasting significant growth in both revenue and profits. The company has shown strong performance in recent quarters, benefiting from shifting trends in consumer spending amid inflation and economic uncertainty.
Recently, Mastercard’s stock reached an all-time high, maintaining a steady upward trajectory since mid-2024, recovering from earlier weaknesses. Market analysts are generally optimistic about the stock, with predictions suggesting a 10% growth over the next year. Investors should consider keeping MA on their radar, as it is likely to remain a leading stock this year.
Analytical Projections
Analysts anticipate that Mastercard’s adjusted earnings per share for the fourth quarter will rise to $3.71, up from $3.18 in Q4 2023. This growth reflects an expected revenue increase of 13% year-over-year, reaching $7.38 billion for the quarter. The earnings report is anticipated to be released on Thursday, January 30, at 8:00 a.m. ET.
The resurgence in travel spending post-pandemic, which typically includes credit card usage, has played a role in Mastercard’s financial uplift. Additionally, the ongoing transition to digital payments, driven by inflationary pressures that prompt consumers to favor non-cash options for essential purchases, has enhanced the financial performances of credit card issuers like Mastercard and Visa.
In pursuit of leveraging crypto technology to create real-world applications for consumers, Mastercard has recently established a partnership with Stellar to incorporate its Crypto Credential system into Stellar’s network.
Robust Q3 Results
In the third quarter, Mastercard reported a 13% annual increase in revenue to $7.4 billion, surpassing expectations, with a currency-neutral growth of 14%. This growth resulted in adjusted earnings rising to $3.89 per share in Q3, compared to $3.39 per share in the same period last year. This growth rate was higher than analysts had anticipated. The unadjusted profit was $3.3 billion or $3.53 per share, an increase from $3.2 billion or $3.39 per share in Q3 2023.
During the Q3 earnings call, Mastercard’s CEO, Michael Miebach, stated, “While the labor market remains strong, trends show it is slightly below historically tight levels. Inflation has eased, with variations across categories and countries. Overall, we maintain a positive outlook towards growth and will continue to adapt to market changes. Our focus will remain on controllable factors, leveraging the significant shift towards electronic payments in both spending and transactions.”
As of Friday, Mastercard’s stock opened slightly higher and continued to show upward momentum. Its value has appreciated by 20% over the past six months.
