Mastercard: Strong Double-Digit Growth In Q1, Despite Losing Russia

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

Summary

• Mastercard released strong Q1 results yesterday (Thursday), continuing a strong recovery, but shares remain 6% lower than a year ago.

• Excluding currency, revenues grew 20% and EBIT grew 40% in Q1, despite currency headwinds and the loss of Russian volumes.

• Strong revenues were driven by a broad-based volume rebound, though further potential remains in Travel, especially in Asia Pacific.

• The outlook implies EBIT will grow by 20% in 2022, with the loss of Russian earnings offset by better-than-expected volumes elsewhere.

• With shares at $367.43, we expect an exit price of $628 and a total return of 74% (16.5% annualized) by 2025 year-end. Buy.

Introduction

Mastercard Inc. reported Q1 2022 results on Thursday (April 28). MA shares finished the day up 4.8%, having already gained 5.0% the day before, after Visa reported its results. However, as of 11:15 am EST on Friday, Mastercard stock is down 3% again at $367.43.

We initiated our Buy rating on Mastercard in April 2019. Total gain since t…