Mastercard offers mid-term guidance, shares rise

Investing.com -- Mastercard (NYSE:MA ) on Wednesday issued new mid-term guidance for the 2025-2027 period, the company’s 8K filing showed. 

The payment processor aims for a compound annual growth rate (CAGR) in net revenue at the upper end of the low double digits for this period.

“One of the key highlights of these 2025-2027 objectives is to deliver a net revenue CAGR in the high teens for the Company's value-added services and solutions,” the filing says.

Moreover, Mastercard is targeting an annual operating margin of at least 55% and expects earnings per share (EPS) to grow at a mid-teens compound annual rate.

The company's shares rose more than 1% in premarket trading Wednesday. 

Mastercard is set to host a meeting for investors starting at 9 am ET Wednesday, where it will offer further insights.

The payment processing giant recently reported stronger-than-expected third-quarter profits, driven by increased consumer spending amid steady economic conditions.

Revenue from its payment network surged by 11%, while value-added services and solutions grew 19% from the prior year, now making up 37% of total revenue.

Excluding one-time costs, Mastercard posted earnings of $3.89 per share, surpassing the $3.74 forecasted by analysts polled by LSEG.

For the quarter ending Sept. 30, profit rose 2% to $3.3 billion, with total revenue climbing 13% to $7.4 billion.

Mastercard, alongside its archrival Visa (NYSE:V ), has been recently facing regulatory headwinds in Europe, where antitrust regulators are investigating whether the two companies are negatively affecting retailers.

According to an EU document seen by Reuters, the European Commission, which oversees competition compliance in the EU, sent questionnaires to retailers and payment service providers in September, requesting responses by October.

Visa and Mastercard, the dominant players in the payment card market, have faced growing complaints from retailers about “scheme fees” introduced in recent years and concerns over their transparency. These fees, charged by card network operators, cover services related to participation in their systems.

According to Reuters, such questionnaires typically enable EU regulators to build an antitrust case, which, if pursued and successful, could result in fines of up to 10% of a company’s global revenue.

Source: Investing.com