MA – Markets expectations are for Uniform ROA to rise, but management may have concerns about product initiatives, macro pressures, and transaction growth
January 4, 2022
- Mastercard (MA) currently trades above corporate and historical averages relative to Uniform earnings, with a 33.6x Uniform P/E (Fwd. V/E’).
- At these levels, markets are pricing in expectations for Uniform ROA to rise, to 87%, accompanied by 7% Uniform asset growth.
- Meanwhile, analysts expect Uniform ROA to only improve to 61% in 2022, accompanied by 12% Uniform asset growth.
- If sustained going forward, these levels would imply a stock price closer to $288, representing approximately 18% equity downside for the firm.
- Moreover, the firm’s most recent earnings call suggests management may have concerns about product initiatives, macro pressures, and transactions growth.