Mastercard: Consistent Double-Digit Growth, Still Reasonably Priced
Company Update (MA US) (Buy)
Highlights
Volume, revenue and EBIT have continued to grow at teens
Consumer spending remains resilient, including in Europe
Regulatory backdrop is benign and Mastercard is testing A2A
P/E is 35.5x relative to 2022 and 32x relative to 2023 estimates
At $389.70, we see 69% upside (18.3% p.a.) by end of 2026. Buy
Introduction
We review our Mastercard investment case 6 months after our last update. Since we last wrote about Mastercard in May, the share price has risen by another 4.4%, taking its rise in the past twelve months to 24%:
Mastercard Share Price (Last 1 Year)
Source: Google Finance (08-Nov-23).
We believe Mastercard remains a solid opportunity capable of delivering a high-teens annualized return. Volume, revenue and Adjusted EBIT have continued to grow at low-to-mid-teens year-on-year in recent quarters. Value-added services are still growing faster than overall revenues. Consumer spending remains resilient. The overall regulatory landscape is benign, and Mastercard is experimenting wit…