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Why Did Mastercard Incorporated (NYSE: MA) Drop So Much?

Mastercard Incorporated (NYSE:MA) traded at $380.01 at close of the session on Tuesday, 01/24/23, made an upward move of 0.38% on its previous day’s price.

Looking at the stock we see that its previous close was $378.57 with the day’s price range being $349.00 – $423.99. The company has a trailing 12-month PE ratio of 37.96. In terms of its 52-week price range, MA has a high of $399.92 and a low of $276.87. The company’s stock has gained about 9.93% over that past 30 days.

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Mastercard Incorporated has a market cap of $357.27 billion and is expected to release its quarterly earnings report on Jan 25, 2023 – Jan 30, 2023. With its Forward Dividend at 2.28 and a yield of 0.60%, the company’s investors could be anxious for the MA stock to gain ahead of the earnings release. Estimates by analysts give the company expected earnings per share (EPS) of $2.62, with the EPS growth for the year raised at $10.53 for 2022 and $12.3 for next year. These figures represent 25.40% and 16.80% growth in EPS for the two years respectively.

Analysts tracking the company’s growth have also given it a consensus growth in revenue estimated at $5.84 billion, with a low of $5.6 billion and a high of $6.2 billion. The median projection represents growth squeezing down to 12.00% compared to sales growth for the corresponding quarter a year ago. According to analyst consensus estimates figures, the company’s yearly revenue forecast for 2022 is expected to hit $22.18 billion, or 17.40% up from figures reported last year.

There have been no upward and no downward revisions for the stock’s EPS in last 7 days, something that reflects the nature of company’s price movement in short term. On the other hand, looking at the outlook for the MA stock, short term indicators assign the stock an average of 100% Buy, while medium term indicators assign it an average of 100% Buy. Long term indicators on average place the stock in the category of 50% Buy.

Looking further, we note that the PEG ratio for the MA stock currently stands at 1.82, and the current price level is 5.08% off its SMA20 and 7.78% from its 50-day simple moving average. The RSI (14) is pointing at 66.62 while the volatility over the past week is 6.96% and jumps to 3.09% over the past one month. The beta value is 1.09, while the average true range (ATR) is currently pointing at 13.27. The average price target for the stock over the next 12 months is $408.21, with the estimates having a low of $310.00 and a high of $455.87. These price ends are 18.42% and -19.96% off the current price level respectively, although investors could be excited at the prospect of a -8.55% if the MA share price touches on the median price of $412.50.

Let’s briefly compare Mastercard Incorporated (MA) stock to its peers. We find that current price change of 0.38% and 7.02% over the past 12 months for MA competes that of JPMorgan Chase & Co. (JPM), which has seen its stock price rise 0.86% in the last trading session and was -4.57% over the last one year. Another of its peers Visa Inc. (V) has dropped -0.13% previous session, and was 8.72% up over the past year, while Bank of America Corporation (BAC) was also up 0.73% in the last session, while its price remained in the red at -23.04% over the same period. Mastercard Incorporated has a P/E ratio of 37.96 compared to JPMorgan Chase & Co.’s 11.45 and Visa Inc.’s 31.98. In contrast to these companies, both the S&P 500 Index and the Dow Jones Industrial were at -0.07% and 0.31%, respectively, at close of the trading.

Coming back to Mastercard Incorporated (NYSE:MA), we note that the average 3-month trading volume was 2.84 million, while that of the preceding 10-day period stands at 3.36 million. Current shares outstanding are 965.00 million.

The insiders hold 10.70% of the company’s shares while institutions hold 78.50%. The data shows that short shares as of Oct 13, 2022, stood at 4.78 million at a short ratio of 1.47. This represents a 0.49% short interest in shares outstanding on Oct 13, 2022. Shares short rose in October from the previous month at 4.24 million. Investors should be excited about this stock as its upside potential is great, with current price pushing the stock 9.28% up in year-to-date price movement.

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