MasterCard (MA) Stock Lower as EU Said to File Antitrust Complaint

NEW YORK (TheStreet) -- Shares of MasterCard (MA) are down by 0.79% to $92.48 in late morning trading on Monday, following a Bloomberg report suggesting the European Union is preparing to hit the credit card company with an antitrust complaint relating to the company's card payment fees.

It is possible that EU regulators will send a statement of objections to MasterCard before the end of next month, sources told Bloomberg adding that these filings in anti-trust investigations generally precede fines.

The EU has been going after payment fees on credit and debit cards for over 10 years and has warned that it is generally agreed that the charges are anti-competitive.

"MasterCard being much more internationally focused, it has been more inclined to fight than to settle so far," Ruth Milligan, a senior adviser on payment services at EuroCommerce, told Bloomberg.

Separately, TheStreet Ratings team rates MASTERCARD INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate MASTERCARD INC (MA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 22.5%. Since the same quarter one year prior, revenues slightly increased by 2.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MA's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.43, which illustrates the ability to avoid short-term cash problems.
  • MASTERCARD INC has improved earnings per share by 21.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MASTERCARD INC increased its bottom line by earning $3.09 versus $2.57 in the prior year. This year, the market expects an improvement in earnings ($3.44 versus $3.09).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 17.2% when compared to the same quarter one year prior, going from $870.00 million to $1,020.00 million.
  • The gross profit margin for MASTERCARD INC is rather high; currently it is at 64.48%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 45.73% significantly outperformed against the industry average.
  • You can view the full analysis from the report here: MA Ratings Report

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