These 'high-quality growth' stocks are trading at a discount, Bank of America says

JB Reed | Bloomberg | Getty Images

Bank of America Merrill Lynch on Thursday upgraded a group of credit card stocks to buy from neutral, citing lower taxes, easing regulations and higher discretionary spending to come under President-elect Donald Trump.

"Expectations have risen for the consumer finance sector broadly since the U.S. election, and we think this optimism will likely persist as initial policy and potential stimulus roll out in 2017. In our view, credit card stocks should enjoy a boost to spending, loan growth and credit performance, thus arguing for higher PE multiples as investors factor in a more constructive environment," equity analyst Kenneth Bruce wrote in a note to clients.