Is Mastercard Stock A Buy Or Hold During The Dip?

(Preview) Company Update (MA US) (Buy)

Summary

• Mastercard stock fell 3.5% on Monday, and is now down 16.1% from its July peak and down 5.6% year-to-date, an opportunity in our view.

• Share price weakness is due to concerns about Amazon's dispute with Visa, Fintech disintermediation and the new Omicron variant.

• We believe these concerns are unfounded. For example, Fintech companies offering Buy Now Pay Later are facing more pressures.

• Mastercard announced new 3-year targets in November, including an EPS CAGR in the low 20s, supporting our investment case.

• With shares at $337.02, we expect a total return of 76% (20.6% annualized) by 2024 year-end, in just over 3 years. Buy.

Introduction

We review our Mastercard International (NYSE:MA) investment case after MA stock started the week by falling 3.5% on Monday (December 20). At $337.02, MA's share price is down 16.1% from its July peak and down 5.6% year-to-date.

We initiated our Buy rating on Mastercard in April 2019. Even with its recent dip, MA stock has gained 45% (including dividen…