As credit losses continue to decline, shares of credit card providers will continue to climb this year, said Bruce Harting, managing director of Barclays Capital.
“We see both from ourselves, and our analysts who covers the big-box retailers, that mid-single digit growth and sales should drive pretty good purchase volumes this year,” Harting told CNBC.
Harting was named the top consumer finance analystby Institutional Investors’ 2010 All-America Research Team survey last October.
Among his picks six months ago, shares of Discover Financial , Capital One and MasterCard all outperformed the S&P 500 index. (See chart below.)
“I would [still buy these stocks],” said Harting. “We think they are still very attractive on a valuation-basis.”
In addition, Harting says higher gasoline pricesprovide a tailwind to the credit card giants.
“Last time we saw the big runup in oil prices, MasterCard andVisa
both experienced stronger growth,” he explained. “And MasterCard in particular gets a tailwind from thedollar weakness
over the last few months, because 62 percent of their revenue comes from the rest of the world—so as they repatriate the revenue sources, they get a bump from that.”
Scorecard—What He Said:
- Harting's Previous Appearance on CNBC (Oct. 13, 2010)
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CNBC Data Pages:
Harting does not own shares of MA. Harting has investment banking clients who own shares of DFS and COF.