(Bloomberg) -- Mastercard Inc. climbed to a record in New York after the payments network boosted its earnings growth target and said it now aimed for the “high end” of its previous full-year revenue forecast.
The company's shares gained as much as 4.3 percent, the biggest intraday jump since January 2016. The stock has climbed 33 percent this year, compared with the 25 percent advance of the 68-company S&P 500 Information Technology Index. The shares have soared more than 30-fold since the company went public in 2006.
Mastercard said in a filing Thursday that it aims for 20 percent annual growth in earnings per share in the three-year period ending in 2018. That's up from a previous target of “mid-teens” growth. The company also expects 2017 adjusted revenue to increase at the high end of its previous target of low-double-digit growth. The firm said it still sees full-year operating expenses expanding in the high single digits.
The new forecast was driven by better-than-expected performance in Mastercard's services business, Chief Financial Officer Martina Hund-Mejean said at the company's annual investor day.
“I'm not doing services for the sake of being in services,” Chief Executive Officer Ajay Banga said during the meeting, which was held at the New York Stock Exchange. The services business “creates the stickiness in a number of the cases where we can hold on to clients the right way with this repertoire that we offer as compared to just credit, debit, prepaid or commercial.”
Mastercard will also become the network that processes payments for Bank of America Corp.'s cash rewards credit cards beginning next year, said Craig Vosburg, president of North America.
To contact the reporter on this story: Jenny Surane in New York at jsurane4@bloomberg.net.
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steven Crabill, Dan Reichl
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