How to Trade Mastercard's 15% Surge on NFT Boom
Mastercard has started off this year by announcing a range of crypto partnership deals with well-known exchanges such as Coinbase and its upcoming NFT marketplace.
The company made some key acquisitions last year as it diversifies its business model to retain its market share of global payments in the face of new competition from fintech start-ups.
Interestingly, the Mastercard stock forecast from several analysts is still bullish. The Mastercard stock price has also held its price well amid the recent stock market decline.
Learn more about the Mastercard stock forecast below and how to trade it.
|Symbol for Invest.MT5 Account:||MA|
|Date of Idea:||26 January 2022|
|Time Line:||1 - 6 months|
|Position Size for Invest.MT5 Account:||Max 7%|
- The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
Why Trade Mastercard Stock?
Mastercard is one of the world’s largest global payment businesses. However, more and more fintech companies are moving into this space which has forced Mastercard to adopt new revenue streams.
The company beat analyst expectations in its last earnings report, largely led by a surge in consumer spending and international money transactions. Here are a few more reasons analysts are bullish on the long-term prospects for Mastercard stock.
Mastercard could benefit from a boom in NFTs with its recent crypto partnerships
Last week, Mastercard announced it has signed a deal with cryptocurrency exchange Coinbase. The agreement will allow Coinbases’s customers to use Mastercard credit and debit cards to make purchases on the upcoming NFT (non-fungible token) marketplace.
Sales in NFTs boomed last year and Mastercard is interested in how they can streamline the buying process for NFTs which currently require a lot of steps and different product applications.
Considering NFT sales went from $250 million in 2020 to more than $2 billion in 2021, Mastercard stock will be one to watch. The company has also announced other crypto deals with Bakkt, Gemini, Mintable and others setting itself to be a leader in this space.
Mastercard is now aiming to tap into "significant untapped opportunities" in a $225 trillion market
At the beginning of the year, Mastercard announced new growth targets for 2022 to 2024. They are ambitious with a forecast of net revenue growth in the “high-teens” and a minimum annual operating margin of 50%.
According to the company, there are still “significant untapped opportunities” in the $225 trillion global payments industry from the acceleration of digital adoption. Growth is expected in commercial transactions, bill payments, services, fraud management, open banking and BNPL (buy now pay later) products.
Mastercard Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for a Mastercard stock forecast in the last 3 months, there are currently 14 buy ratings on Mastercard stock. The highest price level for a Mastercard stock forecast is $494.00 with the lowest price target at $380.00.
The average price target for a Mastercard stock forecast is $433.14 which represents a near 27% upside from current levels.
Source: TipRanks, 25 January 2022
An Example Trading Idea for the Mastercard Stock Price
An example trading idea for the Mastercard stock forecast could be as follows:
- Buy the stock around $355.00 to allow for earnings volatility.
- Target the average analyst price target at $433.14.
- Keep your risk small at a maximum of 7% of your total account.
- Time Line = 1 – 6 months
- If you buy 10 Mastercard shares:
- If target is reached = $781.40 potential profit ($433.14 - $355.00 * 10 shares).
It’s wise to remember that the share price is unlikely to go up in a straight line and it may even go much further down before it rises, especially considering the recent sell-off in global stock markets.
Therefore, be sure to exercise good risk management which is one of the most important aspects of trading successfully. You should always know how much you could potentially lose on a trade and the risks involved.
Another factor to consider is the commission as these can eat into your profits. With the Admirals Invest.MT5 account you can buy US stocks from $0.02 per share. This means buying 10 shares in Mastercard stock would result in a commission of $0.20 ($0.02 * 10 shares).
There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!
How to Buy Mastercard Stock in 4 Steps
With Admirals, you can buy shares in US companies like Mastercard with a low commission of just $0.02 per share and a low minimum commission of just $1.
- Open an account with Admirals to access the Trader’s Room.
- Click on Trade on one of your live or demo accounts to open the web platform.
- Search for Mastercard at the bottom of the Market Watch window and drag the symbol onto the chart.
- Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.
Source: Admirals MetaTrader 5 Web. Past performance is not a reliable indicator of future results, or future performance.
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Do You See the Mastercard Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance Mastercard's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article.
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