Investors Applaud Q2 Results from Mastercard (MA)

Investors are applauding second quarter results from credit card processor, Mastercard (NYSE: MA), sending shares up over 4% today.

Today, Mastercard reported Q2 EPS of $2.67, 25 cents above the consensus of $2.42. Revenues rose 2.7% to $1.3 billion, versus the consensus of $1.25 billion. Highlights for the quarter included net income growth of 26.4%, gross dollar volume down slightly by 0.6%, purchase volume down slightly by 0.7% and total operating expenses down 13%.

Wall Street was mostly impressed with the performance. Analysts at Duncan-Williams reiterated their 'Buy' rating raised their estimates and price target following the numbers. The firm said the biggest surprise was much lower than expected marketing expenses, which they said supports an even stronger margin profile going forward. The firm now see the stock headed to $230/share.

Analysts at Janney Montgomery Scott were more cautious, saying while Q2 results were strong management does not see a recovery in US credit card spending coming until consumer confidence increases, which they said puts the 20% income growth target at risk. JMS maintained their 'Neutral' rating on the shares, with a downside price target of $180 (up from $170).

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