Analysts Remain Mostly Negative On Mastercard

Shares of Mastercard Inc. (MA) continued to decline on Monday following the company’s announcement that it won’t increase fees.

The credit card company, which has seen its shares almost triple since going public in May 2006, also said hiring plans will contribute to higher costs.

MasterCard’s stock briefly rose to an all-time on Friday following higher fourth quarter profit numbers on elevated consumer spending.

While MasterCard beat Wall Street estimates by a substantial margin for the third quarter in a row, analysts remain very mixed as to where the stock is heading.

Deutsche Bank has raised its price target on the stock to US$92 from US$77, with a “hold” recommendation, saying in a research note that the company is trading at a premium to its competitors.

Goldman Sachs analyst Elizabeth Grausam also raised her target to US$85 from US$76, while maintaining the “sell” rating she assigned to the stock in October.

She also considers MasterCard unattractive when compared to other stocks in the same group, saying in a research note that she believes “revenue will decelerate from elevated levels achieved in the past two years leading up to the initial public offering.”

Citigroup analyst Patrick Burton is the only bull in the group, lifting his price target on MasterCard shares to US$109 from US$93 following the quarterly results, representing upside of roughly 8%.

MA 1-yr chart: