FBR Reiterates Market Perform Rating On Mastercard

Scott Valentin of FBR & Co reiterated a Market Perform rating on

following the company's third quarter results on Thursday. Mastercard earned $0.87 per share in its third quarter, topping Valentin's estimates by ten cents. The analyst notes that the beat reflects higher revenues and volume, better operating margin and a lower tax rate. Mastercard reiterated its full year guidance of 11 percent to 14 percent revenue growth and earnings per share compounded annual growth through 2015. The company did mention it could see “significant” opportunity in China but without additional commentary, Valentin is unable to estimate its true potential. The analyst did raise his full year fiscal 2014 earnings per share estimate to $3.10 from a previous $2.98 while fiscal 2015 earnings per share was raised to $3.68 from a previous $3.60, reflecting higher than previously expected transaction volumes. A Neutral (or Market Perform) rating reflects Valentin's concerns over the company's exposure to potentially slowing emerging market economies along with the loss of JPMorgan Chase consumers. Nevertheless, Valentin did raise his price target to $92 from a previous $82, reflecting a strong third quarter and increased 2014 and 2015 earnings per share estimates.