Credit Card Companies Sector Shakeup: Analyst Cautions On Near-Term Risks, Yet Sees Long-Term Stability
Portfolio Pulse from Lekha Gupta
RBC Capital Markets analyst Jon G. Arfstrom revised ratings and price targets for several credit card companies due to a changed near-term view of the industry. American Express Co (AXP) was upgraded to Outperform from Sector Perform with a price target of $200, up from $197. Synchrony Financial (SYF) and Bread Financial Holdings Inc (BFH) were downgraded to Sector Perform from Outperform with reduced price targets of $37 and $43, respectively. Price targets for Capital One Financial Corp (COF) and Discover Financial Services (DFS) were also cut. The analyst sees near-term risks from the CFPB's late fee proposal and potential sentiment risk from ongoing normalization of credit quality and spending trends.
September 05, 2023 | 5:20 pm
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POSITIVE IMPACT
American Express Co (AXP) was upgraded to Outperform from Sector Perform with a price target of $200, up from $197.
The upgrade in rating and increase in price target by the analyst indicates a positive outlook for AXP in the near term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
Bread Financial Holdings Inc (BFH) was downgraded to Sector Perform from Outperform with a reduced price target of $43, down from $46.
The downgrade in rating and decrease in price target by the analyst indicates a negative outlook for BFH in the near term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The price target for Capital One Financial Corp (COF) was cut to $113 from $125.
The decrease in price target by the analyst indicates a negative outlook for COF in the near term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The price target for Discover Financial Services (DFS) was cut to $120 from $130.
The decrease in price target by the analyst indicates a negative outlook for DFS in the near term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
Synchrony Financial (SYF) was downgraded to Sector Perform from Outperform with a reduced price target of $37, down from $41.
The downgrade in rating and decrease in price target by the analyst indicates a negative outlook for SYF in the near term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100