Mastercard's Cross-Border Surge And Pricing Actions Drive Analyst Optimism

JP Morgan analyst Tien-tsin Huang reiterated an Overweight rating on Mastercard Inc. MA on Friday, with a price target of $610.

Mastercard reported fiscal first-quarter net revenues of $7.25 billion, up 14%, beating the analyst consensus estimate of $7.12 billion.

Adjusted EPS rose 13% to $3.73, exceeding the analyst consensus estimate of $3.57.

Also Read: Mastercard Lifts Annual Outlook After Q1 Beat, Fueled By Cross-Border Surge

Revenue yield was ~0.9 bps ahead of Huang’s expectation and up two bps over the prior year, aided by acquisitions, currency volatility, and pricing. As expected, given calendar headwinds and consistent with Visa, volume KPIs decelerated sequentially.

Mastercard posted stable, mid-teens organic revenue growth in the first quarter despite the leap year driving an expected deceleration in volume growth. The upside was broad-based, though management highlighted currency volatility and lower incentives (likely pushed into the rest of the year) as the internal surprise. Volume trends were as expected and consistent with Visa Inc V, showing relative stability adjusted for calendar headwinds.

However, cross-border decelerated slightly more than expected off a higher fourth-quarter base (still comfortably growing mid-teens) and found management’s commentary about the diversification of the high-margin cross-border business to be encouraging.

Assuming no material macro shocks, the analyst feels confident in near-term numbers given pricing actions supporting growth (which will be lapped in the second half).

Mastercard expects net revenue growth in the mid-teens digits for the second quarter, compared to the $7.78 billion consensus estimate. The company expects low teen-digit revenue growth for fiscal 2025, compared to the $31.51 billion consensus estimate.

Reiterated full-year organic guidance implies a comfortable deceleration in second-half trends, which Huang noted should absorb modest macro pressure. Still, material upside to numbers may require additional pricing actions or macro help. The analyst continues to like Mastercard’s premium and diversified growth at scale.

Huang continues to assume rounded 12% foreign exchange neutral or organic revenue growth in 2025, while 2026’s is down to 11% (from 12%). His second-quarter, fiscal 2025, and fiscal 2026 EPS estimates go to $4.03 (from $3.95), $15.90 (from $15.68), and $18.60 (from $18.49).

The price target of $610 applies 33 times multiple Huang’s calendar 2026 EPS, in line with its current next-twelve-months multiple (~33 times) and ~3 turns ahead of its three-year average. The analyst noted that this multiple is reasonable given Mastercard’s premium growth and identified pricing actions helping to de-risk near-term foreign-exchange-neutral or organic estimates, supporting defensive growth, especially as volume growth remains stable. The analyst acknowledged a wide range of macro outcomes.

Price Action: MA stock is up 1.96% at $557.09 at the last check on Friday.

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