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8 Stocks to Consider Ahead of Earnings

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Friday's Closing Price: $339.08

12-Month Median Price Target: $403

Implied Potential Return: 19%

Forward Annual Dividend Yield: 0.2%

Current Analyst Coverage Breakdown: Of the 35 analysts covering the shares, 26 have either strong buy (14) or buy (12) ratings vs. 9 holds.

Commentary: Mastercard is slated to report its fiscal fourth-quarter results on Feb. 2, and Wall Street is expecting earnings of $3.95 a share for the December-ended period on revenue of $1.73 billion.

A steady earnings performer, Mastercard shares are up nearly 45% in the past year as consumer use of plastic instead of cash has ballooned. For the third quarter, the company said worldwide purchase volume rose 17.2% year-over-year to $628 billion.

Mastercard has beaten the consensus earnings-per-share view in seven straight quarters, delivering an average upside surprise of 9.3%. Guggenheim Securities has a buy rating on the stock with a $415 price target but the firm trimmed its earnings estimate for the fourth quarter on Dec. 16 by 30 cents to $4.05 to reflect a slight slowing in margin growth. Buyback activity could narrow the gap though.

"While risk to our estimates is possible from less margin expansion, share repurchases could exceed expectations," the firm said. "Additionally, our estimates reflect a three-year CAGR [compounded annual growth rate] for EPS of 23%, which appears reasonable relative to management's expectations for 20%+ EPS growth from 2011-2013."

Check out TheStreet's quote page for Mastercard for year-to-date share performance, analyst ratings, earnings estimates and much more.
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