Nomura Securities on U.S. Card Companies: Selection is Key (DFS, AXP, COF)

Nomura Securities on U.S. Card Companies: Selection is Key - Dull Industry Outlook Brightened by Stock-Specific Opportunities

Analyst, Bill Carcache, said, "With the benefits of improving credit going away, selecting issuers with attractive loan growth and revenue growth prospects is key to outperformance, in our view. Only Discovery Financial (NYSE: DFS) and American Express (NYSE: AXP) are currently driving both positive revenue growth and loan growth (both have outpaced their peers on the basis of loan growth by 8-10%, on average, in the past six quarters), and we expect them to continue to outperform on both fronts during the nextseveral quarters. We expect decent billings and expense leverage to drive double-digit earnings growth for AXP over the next year, while Capital One's (NYSE: COF) sizable runoff portfolios are likely to challenge loan growth, in our view."

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