Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Visa (NYSE:V) 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 beat analysts’ consensus estimates by 0.5%.
In light of this news, share prices of the companies have held steady as they are up 2.3% on average since the latest earnings results.
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 $10.17 billion, up 14.3% year on year. This print exceeded analysts’ expectations by 3.3%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ transaction volumes estimates and a solid beat of analysts’ EBITDA estimates.
Visa achieved the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 3.8% since reporting and currently trades at $339.55.
Read why we think that Visa is one of the best credit card stocks, our full report is free.
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 32.3% 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 and an impressive beat of analysts’ net interest margin estimates.
Capital One pulled off the fastest revenue growth among its peers. The market seems content with the results as the stock is up 3.1% since reporting. It currently trades at $223.87.
Is now the time to buy Capital One? 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 as it posted a narrow beat of analysts’ transaction volumes estimates.
Interestingly, the stock is up 3% since the results and currently trades at $325.16.
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 topped analysts’ expectations by 2.1%. Overall, it was a strong quarter as it also recorded a decent beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
The stock is up 3.7% since reporting and currently trades at $580.99.
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%. Zooming out, it was actually a strong quarter as it recorded a beat of analysts’ EPS estimates and a solid beat of analysts’ net interest margin estimates.
Synchrony Financial had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 9.4% since reporting and currently trades at $76.
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.
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