Nomura Securities on U.S. Credit Card Companies

Nomura Securities on U.S. Credit Card Companies

Nomura analyst, Brian Foran, said, "Monthly consumer credit trend update. Credit quality continues to improve, and the outlook for losses continues to drop off a cliff. More broadly we see credit improvement across all consumer loans. On average in 1Q11, new delinquency inflows across all consumer loans were ~40% below peak levels. Additionally, loans are stabilizing, up 0.3% on a median basis versus last month, which is in-line with normal seasonality. Continue to favor Capital One (NYSE: COF) and Discover Financial (NYSE: DFS) given improving credit card lending, as both trade ~9-10x 2012E EPS, and revisions are positive. Remain Neutral on American Express (NYSE: AXP due to expense risk."

Other companies include: Visa (NYSE: V) and MasterCard (NYSE: MA)