Mastercard (NYSE: MA) is scheduled to report its fiscal Q4 2022 results on Thursday, January 26, 2023. We expect Mastercard
Our forecast indicates that Mastercard’s valuation is $398 per share, which is 5% above the current market price of around $379. Our interactive dashboard analysis on Mastercard’s Earnings Preview has more details.
(1) Revenues expected to remain in line with the estimates
Mastercard’s revenues (net revenues) grew 20% y-o-y to $16.4 billion in the first three quarters of 2022.
- The cross-border volume fees increased 47% y-o-y to $4.8 billion in the first nine months of the year. It was due to a 51% rise in the cross-border volume. We expect the same trend to continue in the fourth-quarter results.
- The gross-dollar volume increased by 14% over the same period, resulting in an 11% growth in domestic assessment revenues. We expect the fourth-quarter results to be on similar lines.
- The transaction processing fees improved by 19% in the first three quarters driven by a 14% rise in the number of switched transactions. The same pattern is expected to follow in Q4.
- Overall, we forecast Mastercard’s net revenues to remain around $22.18 billion for the full-year 2022.
Trefis estimates Mastercard’s fiscal Q4 2022 net revenues to be around $5.76 billion, in line (just below) with the $5.79 billion consensus estimate.
(2) EPS is likely to beat the consensus estimates
Mastercard Q4 2022 adjusted earnings per share is expected to be $2.61 per Trefis analysis, almost 1% above the consensus estimate of $2.58. The adjusted net income improved 17% y-o-y to $7.4 billion in the first nine months of 2022. It was partly due to growth in the top line and partly due to lower expenses as a % of revenues. We expect the Q4 results to follow the same trend. Overall, Mastercard is likely to report an annual GAAP EPS of $10.57 for the full-year 2022.
(3) Stock price estimate is 5% higher than the current market price
We arrive at Mastercard’s valuation, using an EPS estimate of around $10.57 and a P/E multiple of just below 38x in fiscal 2022. This translates into a price of $398, which is 5% above the current market price of around $379.
Note: P/E Multiples are based on Share Price at the end of the year and reported (or expected) Adjusted Earnings for the full year
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