How Mastercard's Q1 Results Compare With Rival Visa: 3 Analysts Provide Their Takes

Zinger Key Points
  • Mastercard’s volumes underperformed especially in APAC and Europe, one analyst says.
  • Forex headwinds drove a slight reduction in the company’s full-year guidance, another analyst notes.

Mastercard Inc MA shares came under pressure in early trading on Thursday after the company reported its first-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.

Goldman Sachs On Mastercard

Analyst Will Nance maintained a Buy rating while reducing the price target from $534 to $517.

Investors expected "more resilient trends" from Mastercard's results, Nance said in a note.

The company's quarterly results were similar to Visa Inc's V report, "in that ROW volumes underperformed, notably in APAC, but also more idiosyncratically in Europe, where MA continues to lap large deal implementations," he added.

The company guided to "high end of HSD net revenue growth (vs consensus +21.4% yoy), with -2% FX impact (low-end of LDD on a CC basis, ex acquisitions)" for the second quarter, the analyst wrote.

For the full year, Mastercard expects "low-end of low double digit net revenue growth (vs 12% consensus yoy), compared to high-end of LDD previously, with +1-2% FX impact (high-end of LDD on a currency neutral, ex acquisitions basis)," he added.

Check out other analyst stock ratings.

BMO Capital Markets On Mastercard

Analyst Rufus Hone reaffirmed an Outperform rating and price target of $510.

Mastercard's results were "solid," with double-digit revenue growth, Hone said. He added the company's payment network revenue grew by 8% year-on-year ex-currency impact, driven by 22% year-on-year growth in cross-border fees and VAS growth of 15%, despite tougher prior-year comps.

"In contrast to Visa’s reiterated FY24 guidance, year-to-date FX headwinds drove a slight reduction in MA’s FY24 guidance (currency neutral guidance was unchanged)," the analyst further wrote.

JPMorgan On Mastercard

Analyst Tien-tsin Huang reiterated an Overweight rating on the stock.

Mastercard's reported its first-quarter results were ahead of expectations, "while its full-year FXN revenue guidance was reiterated, but reported outlook was lowered for FX," Huang said.

"April trends were directionally consistent with Visa's showing decelerating U.S. volume (+6% vs. +7% in 1Q)," the analyst wrote. Cross-border volume growth declined by 2 percentage points to 16%, he added.

MA Price Action: Shares of Mastercard had declined by 0.0023% to $442.06 at the time of publication on Thursday.

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