Mastercard Incorporated (NYSE:MA) appears well-positioned for growth, driven by robust consumer spending, particularly in the travel sector, an expanded services portfolio, increased cross-border volume, and global expansion initiatives. Over the past year, the stock has shown remarkable performance, gaining 28.9%, outperforming the industry’s 16.8% growth.
Mastercard, boasting a market capitalization of $391.6 billion, stands as a leading global payment solutions provider. It offers a wide array of services, supporting credit, debit, mobile, web-based, contactless payments, and related electronic payment programs for financial institutions and various entities.
Given its promising outlook, this stock is deemed worthy of holding onto at present.
Mastercard’s 2023 earnings are anticipated to reach $12.13 per share according to the Zacks Consensus Estimate, reflecting a notable 13.9% increase from the previous year’s figure. This estimate has remained steady over the past week. Mastercard has consistently surpassed earnings expectations over the last four quarters, with an average beat of 3.2%. This consistent performance is visually depicted in the accompanying graph.
Moreover, the consensus projection for 2023 revenues stands at $25.2 billion, marking a substantial 13.3% rise from the previous year. The growth in Payments Network Net Revenues and Value-added Services and Solutions Net Revenues is expected to bolster the company’s top-line performance.
Projections indicate an almost 13% year-over-year increase in Payments Network Net Revenue, while Value-added Services and Solutions Net Revenues are expected to surge by 13.6% compared to the previous year. These growth figures are underpinned by rising transaction volumes, gross dollar volume (GDV), prudent growth strategies, and strategic partnerships, all of which are likely to sustain Mastercard’s impressive performance.
For 2023, we anticipate an 11.6% year-over-year surge in processed transaction volumes, alongside an estimated GDV increase of 9.7%, driven by strong operations in the U.S., Europe, and Latin America.
Mastercard’s strategic focus on expanding its presence in burgeoning regions positions it favorably for long-term growth. The company’s strategic alliances and partnerships, including those with HealthLock, pan-European Commercial Bank, UniCredit, Canada-based fintech Nuvei, Zanzibar e-Government Agency, and others, are significant positives. Moreover, its commitment to product innovation and launches, such as the ALT ID solution for seamless and secure guest checkout transactions in India and collaborations with Checkout.com and Careem for hassle-free money transfers in the UAE, are expected to continue driving growth in the days ahead.
Nevertheless, there are a few considerations that investors should keep a watchful eye on. Rising expenses and increased rebates and incentives may exert downward pressure on Mastercard’s margins. In 2023, adjusted operating expenses are expected to rise by approximately 11% compared to the prior year. Additionally, intensifying competition in the payment market could impact the company’s growth trajectory. The proposed measures under the Credit Card Competition Act, which aim to enhance competition through alternative credit card processing networks, are worth monitoring. However, we remain optimistic that a well-executed strategic plan will steer Mastercard toward sustained long-term growth.
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Author Faith Yakubu 
