Mastercard’s Future Looks Bright With Turbocharged VAS And Diversified Revenue Mix

Mastercard Inc. (NYSE:MA) reported stronger-than-expected second-quarter results on Thursday, prompting a wave of upward revisions from Wall Street analysts who cited accelerating growth in value-added services (VAS) and solid international volume trends as key drivers of future performance.

The payments giant reported adjusted revenue of $8.13 billion and earnings per share of $4.15, beating consensus estimates. Total net revenue rose 16% year-over-year, while VAS revenue climbed 23% on a reported basis and 22% in constant currency.

This segment, which includes digital authentication, fraud prevention, and customer engagement solutions, is increasingly seen as a major contributor to Mastercard’s long-term revenue diversification.

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RBC Capital Markets analyst Daniel Perlin raised his price forecast on the stock from $650 to $656, maintaining an Outperform rating, citing stronger-than-expected results and upward revisions in full-year guidance.

The firm raised its fiscal 2025 and 2026 revenue and EPS forecasts, supported by the company’s resilience and broad-based growth, particularly in cross-border and switched transaction volumes.

Perlin increased his fiscal 2025 and fiscal 2026 estimates, now projecting revenue of $32.68 billion and EPS of $16.45 in fiscal 2025, and $36.76 billion and EPS of $18.75 in fiscal 2026.

While noting potential headwinds from a fading FX boost and higher rebates and incentives, RBC pointed to strong July trends and positive third-quarter guidance as signs of continued momentum.

JPMorgan’s Tien-tsin Huang also raised his price target significantly, from $610 to $685, while reaffirming an Overweight rating after Mastercard posted ~15% organic revenue growth, exceeding the firm’s 13% forecast and outperforming Visa’s (NYSE:V) 14%.

The firm attributed the beat to FX tailwinds and strong expansion in VAS. Despite a modest slowdown in U.S. volume growth, non-U.S. and cross-border activity remained stable.

Huang revised fiscal 2025 organic revenue growth to 13% (up from 12%) and maintained 2026 at 11%. FX tailwinds contributed materially to revised estimates, pushing projected EPS to $16.31 for fiscal 2025 (from $15.90) and $18.89 for fiscal 2026 (from $18.60).

JPMorgan expects domestic volume growth to moderate further in the second half of 2025 as Mastercard laps large portfolio wins. Huang remains confident in Mastercard’s steady macro environment and strong execution across consumer segments.

Goldman Sachs analyst Will Nance maintained a Buy rating on Mastercard and increased the price forecast from $674 to $688, maintaining a positive outlook on the back of strong second-quarter results and optimistic forward guidance.

The firm pointed to better-than-expected cross border e-commerce trends and accelerating growth in VAS as key positives. Mastercard’s transaction processing volume grew 19% year-over-year, and cross-border volumes rose 19% (15% in constant currency), outperforming Visa.

While U.S. debit volumes were slightly below estimates, international volumes remained healthy. Goldman adjusted its EPS projections upward through 2027, highlighting strong operating leverage and sustained demand for Mastercard’s services.

Nance adjusted his EPS estimates to $16.34 for 2025, $18.76 for 2026, and $21.89 for 2027. He flagged slower U.S. debit growth due to the Capital One portfolio migration but expects limited yield impact.

Price Action: MA stock is trading lower by 1.78% to $556.36 at last check Friday.

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Latest Ratings for MA

Date	Firm	Action	To
Jan 2022	Morgan Stanley	Maintains	Overweight
Jan 2022	Raymond James	Maintains	Outperform
Jan 2022	Raymond James	Maintains	Outperform

View More Analyst Ratings for MA

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