Mizuho, KBW Take a Look at Mobile Payments Leader Mastercard’s Results

November 5, 2018         By: Steven Anderson

Recently, Mastercard rolled out its third quarter numbers, and for the most part, things looked sound. At least, that’s the takeaway from two major analyst firms who dropped word our way about their outlooks for the earnings report. Both KBW and Mizuho dropped us a line, and the news should prove welcome for both Mastercard and its shareholders.

KBW noted that Mastercard’s growth pattern looked solid around the globe. Most of the major regions had positive news to report, with the US chipping in not only “low unemployment” but also “healthy consumer confidence.” Europe threw in unemployment numbers that “continue(s) to decline” as well as strong consumer confidence in at least some pockets. Even Asian markets contributed “relatively positive” consumer sentiment. KBW did point to a “general weakness in the tech sector” for recent weakness in Mastercard shares.

Mizuho, meanwhile, kicked in an expected price target of $228, which isn’t exactly a long shot given that, back on October 3, a share ran $223.13. It’s taken a bit of a hit in recent days, however, dropping to its current level of $197.67 as of this writing. Mizuho also kept its buy rating in place, amid somewhat mixed sentiments. While current figures—revenues, consumer confidence, payment volumes both domestic and cross-border—were sound, there are some larger issues in the equity market that may pose trouble later, including rising rates, as noted by CEO Ajay Banga.

Basically, the figures right now are reasonably good, and there’s a fair chance they will remain as such. However, there are some underlying weaknesses that might suggest some issues to come down the line. Next quarter may not be so impacted by this—after all, we’ve got holiday shopping season coming up, which should put Mastercard in an excellent position. So any trouble seen likely won’t start until at least first quarter 2019. Worse, there’s commonly a lull after the Christmas shopping season concludes in retail, one that can last for a couple of months. Such a development isn’t exactly great news, but there’s little Mastercard can do in response to that unless it can perk up spending by itself.

That’s strictly speculative, and for right now, things are looking bright for Mastercard. How long they can continue to do so, however, is unclear.