Analysts Bullish On Credit Card Companies Yesterday
Analysts were bullish on credit card companies yesterday, with two major companies receiving upgrades.
Visa Inc. was boosted to “Outperform” from “Neutral” at Credit Suisse Group, which said that the stock was attractive at current price levels. Visa’s top competitor, MasterCard, also received an upgrade to “Outperform” from “Neutral” at Credit Suisse Group, and Barclays PLC raised its Earnings estimate on the company to US$ 10.90 a share from US$ 10.85 a share.
Visa added 1.04% to US$ 73.70 while Mastercard gained 0.74% to close at US$216.00 at close of trading yesterday.
U.S. Credit Card Defaults Soar
Credit card defaults continue to soar in the U.S., with write-offs jumping to a record high of 11.49% in August, from 10.52% in July. The default rate was greatest in loans which are 30-59 days overdue, surging to 1.65% from 1.41%.
Increases in these “early-stage” delinquencies usually signals concern for greater losses in the future. As the unemployment rate is expected to continue trending up, the near term doesn’t look very positive for credit card issuers, as the rate of default tends to follow suit.