On Thursday, Tigress Financial Partners maintained a Strong Buy rating on MasterCard (NYSE:MA) and increased the price target to $685 from the previous target. This adjustment follows MasterCard’s reported growth and the expectation that the company will continue to capitalize on the shift towards electronic payments and the growing need for cybersecurity. According to InvestingPro data, MasterCard’s stock is trading near its 52-week high of $576.94, with analyst targets ranging from $465 to $690. The company maintains a "GREAT" financial health score of 3.16 out of 5.
MasterCard’s performance in the fourth quarter of 2024 was notable, with a revenue increase of 14% year-over-year (Y/Y), reaching a record $7.49 billion. This growth was attributed to the company’s robust payment network and the expansion of its value-added services and solutions. The payment network’s net revenue saw a 13% Y/Y increase, supported by a 12% rise in gross dollar volume and a 20% surge in cross-border volume. With a market capitalization of $517.8 billion and trailing twelve-month revenue of $28.17 billion, MasterCard maintains an impressive 100% gross profit margin.
The company’s strategic focus on AI has been a key factor in its success, with over a decade of developing AI initiatives to enhance threat data analysis across the internet. MasterCard’s partnerships and renewals span consumer payments, commercial new payment flows, services, and solutions, contributing to its strong market position.
MasterCard’s innovation in product development has led to the launch of Mastercard One Credential, which simplifies multiple payment options for users. This, along with potential future integration of cryptocurrency payments, is expected to further drive market share growth.
The firm highlighted MasterCard’s resilience in digital transactions, bolstered by its services, amidst robust consumer spending. As of December 31, 2024, there were 3.5 billion Mastercard and Maestro-branded cards issued, indicating the company’s extensive reach.
The analyst from Tigress Financial Partners emphasized MasterCard’s advantageous position amid the global shift to electronic payments, driven by new payment technologies and AI-driven fraud protection. The company’s substantial brand equity, market leadership, and innovative capabilities are projected to continue delivering strong returns on capital, economic profit, and shareholder value.
MasterCard also supports shareholder returns through consistent dividend increases and share repurchases. With these factors in mind, Tigress Financial Partners sees a potential return, including dividends, of over 20% from current levels with the new price target of $685. InvestingPro data reveals that MasterCard has maintained dividend payments for 20 consecutive years, with a 15.15% dividend growth in the last twelve months. For deeper insights into MasterCard’s financials and access to 12 additional ProTips, including detailed valuation metrics and growth forecasts, explore the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Mastercard has made significant strides in integrating digital currencies and blockchain technology into its payment services, with a noteworthy 30% of its transactions tokenized in 2024. The company’s commitment to blockchain ecosystems and digital currencies was highlighted in its filing with the US Securities and Exchange Commission. Mastercard’s net revenue for 2024 saw a 12% increase, amounting to $28.2 billion, reflecting the successful incorporation of new technologies in its operations.
In other executive news, Mastercard’s CEO, Michael Miebach, saw an increase in his base salary and target annual incentive bonus opportunity, as announced in a recent 8-K filing. This adjustment, effective from March 1, 2025, indicates a significant enhancement to the CEO’s potential earnings, contingent upon the achievement of performance goals set by the company.
Analysts from Miuzho suggest that Mastercard could experience a modest uptick in business due to upcoming tariffs on Canada, Mexico, and China, which have been postponed for one month. They estimate a 0.10% increase in payment volume for Mastercard.
Mastercard also declared a quarterly cash dividend and scheduled its annual stockholders’ meeting for 2025. The Board of Directors announced a dividend of 76 cents per share, payable on May 9, 2025, to shareholders recorded as of April 9, 2025. The annual meeting for stockholders is set for June 24, 2025.
Lastly, with the appointment of Treasury Secretary Scott Bessent as the acting director of the Consumer Financial Protection Bureau (CFPB), certain rulings, including the credit card late fee, bank overdraft, open banking, and credit bureau rules, are expected to be put on hold. This development could potentially impact Mastercard, among other credit card companies.
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