Mastercard is set to report its fiscal Q1 2024 results on May 1, 2024, with expectations of beating consensus estimates for both earnings and revenues. The company had a strong performance in the last quarter, with net revenues of $6.5 billion, driven by growth in gross-dollar volume, cross-border volume, and switched transactions. Analysts predict this trend to continue in Q1.
Despite a 30% increase in Mastercard’s stock price from early January 2021 to now, the stock has shown inconsistent returns, with underperformance compared to the S&P 500 in 2021 and 2023. This has been a common trend among individual stocks in recent years, with few able to consistently beat the benchmark index. However, the Trefis High Quality Portfolio, which includes Mastercard, has outperformed the S&P 500 each year over the same period, providing better returns with less risk.
Trefis estimates Mastercard’s valuation to be $471 per share, which is slightly higher than the current market price of around $462. The company’s net revenues for FY 2023 grew 13% year-over-year to $25.1 billion, with strong performance in cross-border volume, gross-dollar volume, and switched transactions. The forecast for full-year 2024 net revenues is around $28.12 billion.
For Q1 2024, Mastercard’s adjusted earnings per share are expected to be $3.27, slightly above the consensus estimate of $3.23. The adjusted net income improved by 13% in FY 2023 to $11.2 billion, driven by top-line growth and lower expenses as a percentage of revenues. Analysts predict an annual GAAP EPS of $14.43 for full-year 2023.
Based on an EPS estimate of $14.43 and a P/E multiple of just below 33x for fiscal 2024, the stock price estimate for Mastercard is $471, 2% above the current market price. This valuation takes into account the company’s strong financial performance and growth prospects. Overall, Mastercard is expected to continue its positive momentum in Q1 and throughout the rest of fiscal 2024. Investors are advised to keep an eye on the company’s earnings report for further insights into its performance and outlook in the coming months.
