Mastercard Incorporated (NYSE:MA) posted another strong quarter, fueled by resilient consumer spending and steady global transaction growth.
The results underscored the company’s ability to navigate currency shifts and competitive headwinds, even as portfolio conversions briefly tempered U.S. volumes in October.
JP Morgan analyst Tien-tsin Huang reiterated an Overweight rating on Mastercard, with a price forecast of $685 after the company reported third-quarter fiscal 2025 results.
Earnings Results
The company reported quarterly net revenues of $8.60 billion, up 17% year-over-year and 15% Y/Y on a neutral currency basis, beating the analyst consensus estimate of $8.53 billion.
Mastercard expects net revenue growth in the high teens for the fourth quarter, versus the $8.71 billion analyst consensus estimate.
Mastercard expressed confidence in the broader economy, pointing to stable inflation, strong labor markets, and near-record financial markets that are boosting consumer wealth and spending.
The company continues to see solid consumer and business spending across both affluent and mass-market segments worldwide.
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Analyst View
The analyst writes that Mastercard delivered solid results, with organic revenue growth surpassing expectations on stable U.S., international, and cross-border volumes.
The analyst says that management maintained a ‘consistent tone’ on the macro environment, noting steady spending trends into October.
Huang said the Capital One conversion slowed October’s U.S. volumes by about three points, an impact investors hadn’t fully anticipated, as the conversion effects appeared earlier and more sharply than expected.
Management says fiscal 2026 revenue will see modest pressure from the roll-off, partially offset by contractual obligations that taper in fiscal 2027, spreading the overall topline effect across years, says the analyst.
Huang now assumes the Capital One debit portfolio, which contributes over $110 billion in debit volume, will roll off by early 2026 (slightly slower than previously estimated), leading to a year-over-year softness in domestic volume growth.
Revised Estimates
Huang raised the fourth-quarter organic growth forecast slightly, reflecting stronger cross-border volume expectations.
For fiscal 2026, the analyst continues to forecast 11% organic revenue growth and 16% EPS growth.
The EPS estimates are now $4.21 for the fourth quarter (up from $4.17), $19.08 for fiscal 2026 (up from $19.05), and $21.88 for fiscal 2027 (up from $21.87), writes the analyst.
Price Action: MA shares were trading lower by 0.62% to $550.24 at last check Friday.
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