Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Synchrony Financial (NYSE: SYF) and its peers.
Credit card companies facilitate electronic payments and extend revolving credit to consumers. Growth comes from increasing digital payment adoption, cross-border transaction growth, and value-added services for cardholders and merchants. Challenges include regulatory scrutiny of fees and practices, competition from alternative payment methods, and potential credit losses during economic downturns.
The 6 credit card stocks we track reported a strong Q2. As a group, revenues were in line with analysts’ consensus estimates.
In light of this news, share prices of the companies have held steady as they are up 4.8% on average since the latest earnings results.
Synchrony Financial (NYSE: SYF)
Powering over 73 million active accounts and partnerships with major brands like Amazon, PayPal, and Lowe's, Synchrony Financial (NYSE: SYF) provides credit cards, installment loans, and banking products through partnerships with retailers, healthcare providers, and digital platforms.
Synchrony Financial reported revenues of $3.65 billion, down 1.8% year on year. This print fell short of analysts’ expectations by 1.3%, but it was still a strong quarter for the company with a beat of analysts’ EPS estimates.
Synchrony Financial delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Interestingly, the stock is up 10.5% since reporting and currently trades at $76.75.
Best Q2: Bread Financial (NYSE: BFH)
Formerly known as Alliance Data Systems until its 2022 rebranding, Bread Financial (NYSE: BFH) provides credit cards, installment loans, and savings products to consumers while powering branded payment solutions for retailers and merchants.
Bread Financial reported revenues of $929 million, down 1.1% year on year, falling short of analysts’ expectations by 0.6%. However, the business still had a very strong quarter with a beat of analysts’ EPS estimates.
The market seems content with the results as the stock is up 3.1% since reporting. It currently trades at $66.19.
Is now the time to buy Bread Financial? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: American Express (NYSE: AXP)
Recognizable by its iconic green logo and the slogan "Don't leave home without it," American Express (NYSE: AXP) is a global payments company that issues credit and charge cards, processes merchant transactions, and offers travel and lifestyle benefits to consumers and businesses.
American Express reported revenues of $13.24 billion, up 9.4% year on year, in line with analysts’ expectations. Still, it was a satisfactory quarter.
Interestingly, the stock is up 4.8% since the results and currently trades at $330.78.
Read our full analysis of American Express’s results here.
Capital One (NYSE: COF)
Starting as a credit card company in 1988 before expanding into a full-service bank, Capital One (NYSE: COF) is a financial services company that offers credit cards, auto loans, banking services, and commercial lending to consumers and businesses.
Capital One reported revenues of $12.49 billion, up 31.4% year on year. This number came in 1.2% below analysts' expectations. More broadly, it was actually a strong quarter as it produced a beat of analysts’ EPS estimates.
Capital One achieved the fastest revenue growth among its peers. The stock is up 5% since reporting and currently trades at $227.97.
Read our full, actionable report on Capital One here, it’s free.
Mastercard (NYSE: MA)
Recognizable by its iconic "Priceless" advertising campaign that has run in over 120 countries, Mastercard (NYSE: MA) operates a global payments network that connects consumers, financial institutions, merchants, and businesses, enabling electronic transactions and providing payment solutions.
Mastercard reported revenues of $8.13 billion, up 16.8% year on year. This result beat analysts’ expectations by 2.1%. Overall, it was a strong quarter as it also produced a beat of analysts’ EPS estimates.
The stock is up 6.1% since reporting and currently trades at $594.50.
Read our full, actionable report on Mastercard here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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