By Sam Boughedda
Mastercard Inc (NYSE:MA) shares are down Thursday after it reported second-quarter earnings before the bell, missing analyst expectations.
Mastercard posted earnings of $2.34 per share, $0.01 worse than the analyst estimate of $2.35, and revenue of $5.5 billion versus the consensus estimate of $5.26 billion.
Following the report, analysts at Evercore ISI, RBC capital, JPMorgan, and Goldman Sachs provided commentary in notes to clients:
Evercore ISI maintained an Outperform rating and $430 price target on the stock, telling investors that Mastercard's revenue and earnings substantially exceeded their forecast. "Cross-border volume rose 58% on a local currency basis, accelerating from 53% growth in 1Q/22. Through July MTD, cross-border volume increased 54% y-o-y in local currency while Ex-Intra-Europe cross-border gained 60%. Same period, switched volume increased 18%, decelerating from 21% in 2Q/22, driven by an 12% increase in the U.S. and 24% internationally," they wrote.
RBC Capital maintained an Outperform rating and a $417 price target on Mastercard shares. They told investors the "results highlight continued strength in the company's volumes; however, y/y volume growth, excluding cross-border, slowed modestly compared to the previous quarter. Cross-border volume growth accelerated to +58% y/y compared to 53% in the previous trends. July growth trends remain strong, but show modest deceleration, while volumes are relatively stable compared to 2019 levels."
JPMorgan maintained an Overweight rating and $425 price target on Mastercard, stating, "2Q22 EPS of $2.56 handily beat JPMorgan/Street estimates at $2.38/$2.37."
"Most revenue lines were ahead of views, while incentives grew several points faster vs. our model. Volume KPIs were also generally ahead of consensus, with US debit volume and processed transaction growth coming out lighter off tough stimulus comps and the loss of Russia. U.S. and global volumes had healthy trends, while cross-border travel saw a strong acceleration similar to Visa (NYSE:V)," added JPMorgan analysts.
Finally, Goldman Sachs told investors Mastercard's overall results were "solid and similar to Visa."
"MA took up its top line guidance while also guiding to higher costs. Similarly, MA pointed towards no reduction overall consumer spending, nor any impacts from inflation so far," continued the Goldman Sachs analysts. "Additionally, MA's results showed relative stability on trends to date in July, with relatively stable overall payment volume and with some substitution between higher cross border travel and lower cross border e-comm driving relative stability in the recovery in cross border. With results coming in largely as expected, we would expect today's results to be supportive for shares.