Mastercard Incorporated (NYSE: MA) shares have weakened more than 6% last trading week, even though the company reported better than expected third-quarter results on Thursday. Mastercard continues to improve its position in the market, and the company’s management expects another EPS beat in the next fiscal quarter.

Revenues advanced above pre-Covid levels

Mastercard reported better than expected third-quarter results on Thursday; total revenue has increased by 30.2% Y/Y to $5 billion, which was more than expected, while the GAAP EPS was $2.44 (beats by $0.25).

It is important to say that earnings per share were up 48% compared to a year ago, and third-quarter net revenues were 11% above pre-Covid levels in 2019.

Through the third quarter, volume trends steadily improved each month, driven by the recovery in markets from the pandemic, and the company’s management expects another EPS beat in Q4. Mastercard continues to improve its position in the market, and revenue growth for the fourth quarter should be around 20%.

Mastercard is in the growth phase in most markets domestically and in many markets cross-border spending as well while CEO Michael Miebach added:

We see continued strength in domestic spending, and overall cross-border volumes are now back at 2019 levels though there still remains significant room for growth in cross-border travel. We’re continuing to execute against our strategic priorities with good progress on the product and deal fronts this quarter.

Mastercard shares could advance above the current price levels in the upcoming weeks; still, there is increasing uncertainty around a number of factors.

The Delta variant of the coronavirus continues to pose downside risks; the U.S.-China relationship remains complicated, a supply chains crisis represents a serious issue for the global economy, and taken together, these items have the potential to be a headwind to growth.

Mastercard is currently trading at a forward P/E ratio of 40, the book value per share is around $6, and with the market capitalization of $329 billion, shares of this company are not undervalued.

Bears in control of Mastercard

Mastercard shares have weakened from their record highs above $400 registered in April 2021, and the current share price stands at $335.

Data source: tradingview.com

Mastercard shares remain under pressure, and if the price falls below $320 support, it would be a strong “sell” signal. On the other side, if the price jumps above $360 resistance, it would signal trading shares, and the next target could be at $380 or even above.

Summary

Mastercard continues to improve its position in the market, and the company reported better than expected third-quarter results on Thursday. Mastercard shares remain under pressure; still, if the price jumps above $360 resistance, the next target could be at $380.

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