Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Capital One (NYSE:COF) and the best and worst performers in the credit card industry.
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 beat analysts’ consensus estimates by 0.5%.
In light of this news, share prices of the companies have held steady as they are up 3.1% on average since the latest earnings results.
Best Q2: 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 $12.58 billion, up 31.9% year on year. This print fell short of analysts’ expectations by 0.6%, but it was still a very strong quarter for the company with a beat of analysts’ EPS estimates.
Capital One pulled off the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 3.5% since reporting and currently trades at $224.84.
Is now the time to buy Capital One? Access our full analysis of the earnings results here, it’s free.
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.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.2% since reporting. It currently trades at $63.42.
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 1.8% since the results and currently trades at $321.60.
Read our full analysis of American Express’s results here.
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 print beat analysts’ expectations by 2.1%. Overall, it was a strong quarter as it also logged a beat of analysts’ EPS estimates.
The stock is up 5.8% since reporting and currently trades at $592.70.
Read our full, actionable report on Mastercard here, it’s free.
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 result lagged analysts' expectations by 1.3%. Aside from that, it was a strong quarter as it recorded a beat of analysts’ EPS estimates and .
Synchrony Financial had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 9% since reporting and currently trades at $75.70.
Read our full, actionable report on Synchrony Financial here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.