MA stock is in the red today after Mastercard (NYSE:MA) warned the coronavirus outbreak could hit its 2020 revenue, as well as a change to its CEO.
The credit card firm lowered its three-week-old forecast for quarterly revenue growth as the spreading coronavirus wreaks havoc on global markets, curbing international travel, and even impacting e-commerce. The firm said that it is reducing its forecast by 2% to 3% from the initial prediction made on January 29. This means that the company is now expecting 9% to 10% on a currency-neutral basis, excluding acquisition. MA stock is down over 6% as a result.
“Cross-border travel, and to a lesser extent cross-border e-commerce growth, is being impacted,” Mastercard said in a statement. “There are many unknowns as to the duration and severity of the situation and we are closely monitoring it.” The company added that, “If the impact is limited to the first quarter only, we expect that our 2020 annual year-over-year net revenue growth rate would be at the low end of the low-teens range.” MA stock is currently trading for $303.98.
In addition to cutting its forecast for the quarter, Mastercard has also announced that its long-time CEO Ajay Banga will leave his position next year and take over as Executive Chairman. Michael Miebach, Mastercard’s Chief Product Officer, will succeed Banga as CEO effective January 1 next year, while Banga will take Richard Haythornthwaite’s position. Since taking over as CEO in 2006, Banga has overseen massive growth in MA stock from around $4 in 2006 to today’s price of over $300.
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In a statement praising his successor, Banga said Miebach has “a proven track record of building products and running businesses globally,” and that “During the course of Michael’s 10 years at Mastercard, he has been a key architect of our multi-rail strategy — including leading the acquisition of Vocalink and the pending transaction with Nets — to address a broader set of payment flows.”
If MA stock is catching your eye, you might want to check out our piece on the battle for supremacy in the mobile payment industry.
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