Mastercard: Invest for Profits, Not Difficulty Points
Company Update (MA US) (Buy): This "obvious" stock has gained another 43% in the past 20 months; we expect strong returns for years to come.
Highlights
Shares gained 141% since our 2019 initiation, despite a well-known thesis.
Gains primarily driven by earnings growth; P/E has only moved up ~2x.
Structural trends drive growth, and a mid-teens EPS CAGR is expected.
Q2 results should remain strong, and we expect resilience in any downturn.
At $555.52, we see 69% upside (16.5% p.a.) by end of 2028. Buy.
Introduction
We review our Mastercard investment case roughly 2 years after we last published research on the company in November 2023; the share price has risen another 43% in this period, and is up 83% compared to 5 years ago:
Mastercard Share Price (Last 5 Years)
Source: Google Finance (15-Jul-25).
We originally initiated a Buy rating on Mastercard in April 2019, and bought shares in real life at round the same time; shares have now gained 141% (including dividends) since our initiation. We have also included Mastercard in our “Select 15” model portfolio since its inception at the start of 2023, and that position is now showing a 34% gain.
Mastercard is an example of how high-quality large caps can continue to generate strong returns for shareholders, even after their investment cases have become well known. We expect a mid-teens annualized return over the next few years.
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