-- Mastercard's (MA) recent guidance has assumed that the Middle East conflict will be resolved in Q2, raising investor concern around potential risks to H2 in case the hostilities extend beyond the quarter, RBC Capital Markets said in a note emailed Friday.
The company posted a Q1 adjusted earnings and revenue beat, as well as a slight boost to full-year 2026 guidance, RBC analysts said. Value-added services provides diversification with revenue continuing to scale, and almost all of its cards globally are enabled for Mastercard Agent Pay, the analysts noted.
However, cross-border and travel-related volumes dropped to 9% and 2% in April month-to-date due to the Middle East conflict, portfolio shifts, and a one-time calendar timing of Ramadan and Easter, according to the note.
Mastercard's full-year 2026 guidance relies on the assumption that Middle East
conflict ends in Q2, painting a picture where that particular quarter is the weakest one, and then recovery, the analysts said. They said that if the conflict prolongs, investors would debate how the guidance will be impacted.
RBC kept the company's stock rating at outperform and reduced the price target to $629 from $656.
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