Mastercard Q4 preview: Where next for MA stock?

Josh Warner
By :  ,  Former Market Analyst

When will Mastercard release Q4 earnings?

Mastercard will release fourth quarter and full year results on Thursday January 27.


Mastercard Q4 earnings preview

Mastercard beat expectations in the last quarter as the global economy continued to recover from the pandemic as restrictions eased, leading to a recovery in consumer spending and cross-border transactions. That trend is expected to have continued in the final quarter, although there is still some uncertainty lingering over 2022.

Mastercard has said revenue will rise by low-20% rate in the fourth quarter but Wall Street forecasts Mastercard will report a 25% rise in net revenue to $5.2 billion from the $4.1 billion booked the year before.

Still, some analysts believe Mastercard could deliver even faster growth given the quarter covers the busy holiday shopping season and that travel, which accounts for up to a quarter of Mastercard’s revenue, has continued to recover despite the spread of Omicron. CEO Michael Miebach said business travel, including commutes back to the office, had improved in the last quarter following the recovery in leisure travel, and cross-border volumes (the amount spent on cards outside the country it was issued) jumped 52% year-on-year in the third quarter to return to pre-pandemic levels for the first time as international travel rebounded and restrictions eased.

Diluted EPS is expected to follow 24% higher to $2.21 from $1.78 last year. While that rate of improvement in both sales and earnings will be welcomed, it will mark the third consecutive quarter of slower growth.

This places pressure on the outlook for the rest of 2022, with markets still concerned with the high level of uncertainty lingering over consumer spending this year. But analysts are currently bullish and believe Mastercard can deliver 20% revenue growth and a 24% rise in EPS in 2022.


Where next for MA stock?

Mastercard shares have lost almost 6% in value since the start of 2022 and are currently trading at their lowest level in over a month.

Having swiftly fallen below the 200-day sma of $360 this week, the stock is currently testing both the 50-day and 100-day sma at the $349 mark. Sellers managed to briefly push the stock to a 6-week low yesterday, which attracted an influx of buyers into the market. The RSI is sinking further into bearish territory, suggesting the $349 floor won’t hold, which could bring the 13-month low of $306 into play. Notably, Mastercard shares traded within a fairly tight range during the four months to December, but that has since widened with the share price booking both higher highs and lower lows.

The 50-day sma has recently crossed above the 100-day sma, providing a bullish signal. If Mastercard shares can hold the current $349 floor, then it can once again target a recovery to the 200-day sma at $360 before starting to eye the 2022-high of $382.

Mastercard shares have sunk 6% since the start of 2022


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