Nomura Securities on U.S. Cards: Q4 Wrap-Up
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Price: $201.52 +0.71%
Rating Summary:
27 Buy, 15 Hold, 2 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 14 | Down: 11 | New: 17
Rating Summary:
27 Buy, 15 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 14 | Down: 11 | New: 17
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Nomura Securities on U.S. Cards: Q4 Wrap-Up
Analyst, Brian Foran, said, "4Q results saw a resumption of loan growth after three years of shrinkage, and with fairly stable yields. Spend growth decelerated, albeit slightly. Expenses remain a mixed bag, with the problem child baton passing from Amex to Capital One. Rewards expense, however, took a breather. Finally, credit remains good although charge-offs are near cyclical troughs, and with growth resuming that means provisions have bottomed. We remain constructive on COF and DFS – they are priced as no growth stocks at a time when loans are inflecting (expenses be damned). Capital One (NYSE: COF) and Discover (NYSE: DFS) trade at 8x 2012E and American Express is at 12x. In fairness, COF is the one with negative revisions, with consensus down 5% year to date. Revisions have been roughly flat at Discover and Amex (NYSE: AXP). We have already updated DFS and COF, with this note we update Amex to $4.15 in 2012E (from $4.00 on better expenses) and $4.40 in 2013E (unchanged)."
Other Card Names Include: Visa (NYSE: V), MasterCard (NYSE: MA), JPMorgan (NYSE: JPM), BofA (NYSE: BAC), Wells Fargo (NYSE: WFC), Citi (NYSE: C), HSBC (NYSE: HBC)
Analyst, Brian Foran, said, "4Q results saw a resumption of loan growth after three years of shrinkage, and with fairly stable yields. Spend growth decelerated, albeit slightly. Expenses remain a mixed bag, with the problem child baton passing from Amex to Capital One. Rewards expense, however, took a breather. Finally, credit remains good although charge-offs are near cyclical troughs, and with growth resuming that means provisions have bottomed. We remain constructive on COF and DFS – they are priced as no growth stocks at a time when loans are inflecting (expenses be damned). Capital One (NYSE: COF) and Discover (NYSE: DFS) trade at 8x 2012E and American Express is at 12x. In fairness, COF is the one with negative revisions, with consensus down 5% year to date. Revisions have been roughly flat at Discover and Amex (NYSE: AXP). We have already updated DFS and COF, with this note we update Amex to $4.15 in 2012E (from $4.00 on better expenses) and $4.40 in 2013E (unchanged)."
Other Card Names Include: Visa (NYSE: V), MasterCard (NYSE: MA), JPMorgan (NYSE: JPM), BofA (NYSE: BAC), Wells Fargo (NYSE: WFC), Citi (NYSE: C), HSBC (NYSE: HBC)
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