Send me real-time posts from this site at my email
Motley Fool

Why Shares of Mastercard Are Falling Today

What happened

Shares of Mastercard (NYSE: MA) had fallen more than 6% as of 12:07 p.m. EDT today after the company's rival Visa (NYSE: V) reported earnings yesterday.

So what

For the fourth fiscal quarter of the year, Visa reported earnings per share of $1.65 on total revenue of $6.6 billion. Both numbers beat estimates from analysts. The company's board of directors also recently approved a dividend increase of 17%.

Payments volume at Visa grew 17% from the fourth fiscal quarter of 2020, while cross-border payments volume jumped 38% on a year-over-year basis.

Image source: Getty Images.

"Our performance was driven by the continuation of the recovery in many global economies and the increased diversification of our revenue with new flows and value added services," CEO Alfred Kelly said in a statement.

However, shares of Visa and Mastercard declined today after Visa CFO Vasant Prabhu said on the company's earnings call that "revenue growth poses the greatest challenge," being "significantly dependent on the pace of the cross-border travel recovery."

Visa expects revenue in 2022 to grow somewhere in the mid-teen-percentage range, while analysts had initially thought the company could grow revenue 20% in fiscal 2022.

Now what

Visa and Mastercard are very similar companies, so if Visa sees slower revenue growth ahead, it is only natural that Mastercard investors might expect a similar outcome. Mastercard reports earnings tomorrow, so we'll find out for sure soon.

10 stocks we like better than Mastercard
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Mastercard wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of October 20, 2021

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Mastercard and Visa. The Motley Fool has a disclosure policy.


Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue