2024-04-27 06:00:14 ET
Summary
- Mastercard is a hold going into earnings, but could become a buy if it exceeds expectations.
- U.S. consumer spending has been strong, benefiting the entire card sector.
- Mastercard faces risks from interchange fees, competition from other payment technologies, and regulatory challenges.
Investment Thesis
Heading into earnings on May 1st, I believe Mastercard ( MA ) is a hold. Despite this period being a traditionally weaker one for the payments processor, the company has historically been capable of surpassing Wall Street's earnings expectations, meaning I could move to a buy if the company exceeds expectations early next month. U.S. consumer spending has exhibited surprising resilience so far this year, as indicated by recent economic data. In particular, retail sales have witnessed a much stronger comeback to benefit the entire card sector with a boost in transaction volumes directly contributing to their revenue streams....
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Mastercard Q1: Competition Makes This A Big Quarter