MasterCard Incorporated (NYSE:MA) turned bearish on news of suspended operations in Russia. The news means that MasterCard will no longer process transactions for its Russian customers and for all cards issued by Moscow banks.
The suspension follows sanctions on Russia for invading Ukraine. Investors fear that the company will suffer a decline in revenues and miss earnings targets for the year.
The Russian market is an important segment for MasterCard and thus the reason for the stock fall. However, analysis shows that the decline in shares will be replaced by growth in other markets across the world as global travel grows. MasterCard is still one of the most popular forms of payment for international travelers.
The Russian problem is not the only concern for MasterCard, which is why this analysis recommends caution in trading the company’s stock. Accelerating inflation and a potential increase in interest rates will play a significant role in how the company performs both in terms of revenues and in the capital markets. Due to potentially higher interest rates, the share price would be under significant pressure in the foreseeable future.
MasterCard shedding value to find support at $275
Source – TradingView
The stock traded at $324.59 at the time of presenting this analysis. The share price was also on a definitive downward trend, confirmed by the short-term moving averages slipping below MA 50. MACD also shows that bearish momentum is building up for the stock. This analysis projects that MasterCard will find support at $275.
Summary
MasterCard announced the withdrawal of services for all Russian cards. The major risk for the company, however, arises from the rising inflation and the possible increase in interest rates this month. The share price is on a decline to find new support at $275.
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