Mastercard Inc. provides financial transaction processing services which offer payment processing for credit and debit cards, electronic cash, automated teller machines, and travellers checks.
While macroeconomic challenges prevail, the company remains one of the world's leading global payments technology companies with a broad geographic footprint connecting a wide-ranging userbase through a web of technologies. Mastercard remains focused on executing on its innovative strategies and acquisitions to gain an edge against its competitors and enhance its long-term growth prospects.
Technically an incomplete ascending triangle pattern makes the stock attractive as an investment opportunity (see the black converging trendline on the main chart as well as the insert). When the stock price breaks through the upper range of this pattern, it may experience a sharp upward move, which can offer a further buying opportunity.
The expectation is for the price to remain inside the ascending triangle pattern. However, the pattern's reliability may be affected by the broader market conditions and the specific sector in which the stock operates.
Fading downside momentum according to the Moving Average Convergence Divergence (MACD) indicator supports a bullish bias.
The stock remains above its 200-day simple moving average which is generally considered a positive sign for the price trend.
Relative Strength Index (RSI) forward calculations suggest that the share will be in overbought territory around $500, which classifies our profit target as realistic.
We suggest a low at-risk allocation for this trade and a medium technical rating for this analysis.
Share Information
| Share code | MA |
|---|---|
| Industry | Software & Services |
| Market capatalisation (USD) | 330.88 billion |
| One year total return | 7.53% |
| Return year-to-date | -0.02% |
| Current price(USD) | 347.11 |
| 52 weeek high(USD) | 390.00 |
| 52 week low(USD) | 276.87 |
| Financial year end | December |
| Closing paragraph | The stock is trading at a Beta of 1.3, which indicates it is 30% more volatile than the S&P 500 index. Expect moderate fluctuations in the price going forward. |
Consensus expectations
(Bloomberg)
| FY22 | FY23E | FY24E | FY25E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 10.65 | 12.19 | 14.50 | 16.88 |
| Growth (%) | - | 14.41 | 19.02 | 16.42 |
| Dividend Per Share (USD) | 1.96 | 2.17 | 2.39 | 2.59 |
| Growth (%) | - | 10.66 | 9.96 | 8.76 |
| Forward PE (times) | - | 28.49 | 23.93 | 20.56 |
| Forward Dividend Yield (%) | - | 0.62 | 0.69 | 0.75 |
| Closing paragraph | Growth prospects remain robust over the medium-term. The group remains well-positioned to benefit from positive operating tailwinds from the on-going recovery in travel and leisure as well as the ongoing secular shift towards card-based and electronic payments. | |||
Buy or Sell Rationale
Technical Analysis :
Long-term fundamental view:
| Share Name and position | KEY - Stop loss (Close the Position) | ALB - Stop loss (Close the Position) | BDRY - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 18.73 | 267.39 | 9.05 |
| Current | 17.31 | 236.75 | 9.92 |
| Movement | 9.6% | 1.6% | 0.8% |
| Summary text | After the share hit our stop-loss level, we closed the position. A bearish MACD crossover signals a shift in the direction of the trend. | We closed the position after the stock hit our stop-loss level. Strong downward price momentum remains a concern. |
The stock is in an accumulation phase and is trading just below its 200-day simple moving average. Upside price momentum supports the bullish trend.
The take profit target is set at $12.00 with a trailing stop-loss at $8.70. We plan to exit the position around 21 June 2023. |
| Share Name and position | EXR - BUY (Continue to hold) | ATVI - BUY (Continue to hold) | KR - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 157.83 | 77.71 | 46.91 |
| Current | 160.41 | 78.37 | 47.25 |
| Movement | 1.6% | 0.8% | 0.7% |
| Summary text |
The price appears to be retracing from the lower range of a linear regression channel pattern. The stock is testing its 200-day simple moving average, but upside momentum has halted - a concern to the bullish trend.
Our take profit target is set at $180.00 with a trailing stop-loss at $151.00. We plan to exit the position around 3 May 2023. |
The price is forming a symmetrical triangle pattern and is currently trading above its 200-day simple moving average. Upside price momentum supports the bullish trend.
Our take profit target is set at $84.00 with a trailing stop-loss at $75.40. We plan to exit the position around 30 June 2023. |
The price is remains above key support and is currently testing its 200-day simple moving average. The bullish trend is supported by upside price momentum.
Our take profit target remains at $52.00, with a trailing stop-loss at $45.00. We plan to exit the position on 30 June 2023. |
