Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Capital One (NYSE:COF) 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 Q3. As a group, revenues beat analysts’ consensus estimates by 1.4%.
In light of this news, share prices of the companies have held steady as they are up 4.2% on average since the latest earnings results.
Best Q3: 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 $15.36 billion, up 53.4% year on year. This print exceeded analysts’ expectations by 2.2%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ net interest margin estimates.
Capital One achieved the fastest revenue growth of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $218.
Is now the time to buy Capital One? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 $3.82 billion, flat year on year, outperforming analysts’ expectations by 0.9%. The business had a very strong quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ net interest margin estimates.
The market seems happy with the results as the stock is up 5.4% since reporting. It currently trades at $76.95.
Is now the time to buy Synchrony Financial? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Visa (NYSE:V)
Processing over 829 million transactions daily and connecting billions of cards to 150 million merchant locations worldwide, Visa (NYSE:V) operates one of the world's largest electronic payments networks, facilitating secure money movement across more than 200 countries through its VisaNet processing platform.
Visa reported revenues of $10.72 billion, up 11.5% year on year, exceeding analysts’ expectations by 1.1%. Still, it was a mixed quarter due to its lackluster performance in other areas of the business.
As expected, the stock is down 3.7% since the results and currently trades at $334.30.
Read our full analysis of Visa’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 $8.60 billion, up 16.7% year on year. This print topped analysts’ expectations by 0.8%. Aside from that, it was a mixed quarter as it also logged a decent beat of analysts’ EBITDA estimates but a significant miss of analysts’ transaction volumes estimates.
The stock is down 1.7% since reporting and currently trades at $545.30.
Read our full, actionable report on Mastercard here, it’s free for active Edge members.
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 $13.82 billion, up 10.8% year on year. This number surpassed analysts’ expectations by 2.8%. It was a strong quarter as it also recorded an impressive beat of analysts’ transaction volumes estimates and a decent beat of analysts’ revenue estimates.
American Express achieved the biggest analyst estimates beat among its peers. The stock is up 12.7% since reporting and currently trades at $364.30.
Read our full, actionable report on American Express here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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