Image Source: Zacks Investment ResearchBut what can investors expect from the financial titans in their releases? Let’s take a closer look.
Revisions Reflect Slight Bearishness
EPS expectations for both companies have been revised marginally lower over recent months, with the $2.66 per share estimate for Visa suggesting 11% year-over-year growth. The $3.68 Zacks Consensus EPS estimate for Mastercard reflects 15% growth from the year-ago period.
Visa –
Image Source: Zacks Investment Research
Mastercard –
Image Source: Zacks Investment ResearchTop line revisions primarily paint the same story, with sales expectations for both Visa and Mastercard marginally lower over the same time frame.Nonetheless, the estimates suggest strong top line growth, with Mastercard expected to see 15% sales growth while Visa’s top line is expected to enjoy a 10% move higher from the year-ago period. While revisions have been marginally negative, the YoY growth rates on both the top and bottom lines are still notably strong.
Valuation Reflects Big Growth Expectations
Both stocks are a tad expensive relative to historical values, likely reflective of higher growth expectations among investors. MA shares currently trade at a 32.5X forward 12-month earnings multiple, while the same for Visa stands at 28.3X.Both values remain above five-year medians but well beneath five-year highs. The same can be said for each’s current PEG ratio, which are again above five-year medians but otherwise nowhere near five-year highs.
Image Source: Zacks Investment ResearchWhile the multiples are a tad stretched, the above-mentioned growth investors expect is primarily coming from continued consumer strength and an overall resilient U.S. economy. Both companies benefited from this in their latest quarterly releases, seeing higher volumes across many key segments.
Bottom Line
With the 2024 Q4 earnings cycle in full swing, we’ll have a wide variety of quarterly releases to dig through in the coming weeks.Among the bunch of notable companies on the docket this week include the duo of Visa and Mastercard.Revisions for the period have been taken modestly lower over the last several months but have otherwise remained stable. Valuation multiples have risen among higher growth expectations among investors stemming from a strong consumer, with both companies expected to post double-digit percentage YoY EPS and sales growth.Both stocks are heading into their releases with momentum, with positive talk surrounding the consumer likely to keep the positivity rolling.More By This Author:Bear Of The Day: Nike These 3 Companies Generate Serious Cash3 Consistent Dividend Stocks To Buy For Passive Income
