<News alert> 4Q23 adj. EPS beat consensus, strong financial outlook holds
- Mastercard posted 4Q23 results, adj. diluted EPS of $3.18, beat market consensus of $3.08
- Key business drivers continued to record growth on all fronts
- Mastercard guided 1Q24F net profit to grow at low double-digits, largely in line with expectations
4Q23 adj. EPS of $3.18 beat market expectations of $3.08. 4Q23 net revenue grew by 13% to $6.5b or 11% on a currency-neutral basis, in line with market expectations. The growth in net revenue was buoyed by strength in payment network, supported by resilient consumer spending and continued recovery of cross-border travel, as well as value-added services and solutions being on track. Key business drivers continued to record growth on all fronts: gross dollar volume (GDV) grew 10%, cross-border volume increased 18% globally, and switched transactions was higher by 12%.
Upbeat growth outlook supported by healthy consumer spending and rapid expansion of value-added services and solutions. We expect that consumer spending will be supported by a strong labor market and wage growth, translating into strong net revenue growth. Value-added services and solutions are expected to grow at a faster pace than payment network, although 1Q24F is expected to be lower relative to other quarters due to intensified competition. Management guided a low double-digit growth forecast for 1Q24F net profit, largely in line with expectations. Based on resilient growth levers and diversified business products, we maintain BUY, lift TP to $520.