BUZZ-Card industry sees mixed trends in 2024 amid macro instability
Card company stocks remained mixed in 2024 as high borrowing costs prompted a large section of customers to cut back on spending, while the affluent continued to make purchases
The Federal Reserve's stance on hiking rates to a record high level to battle inflation did not help U.S. payments industry as lower-income Americans struggled with purchases
However, hopes for a soft economic landing and rate cuts towards the end of the year helped Visa V.N and Mastercard MA.N recoup some losses
Visa CFO Chris Suh told Reuters in October that he expects consumer resilience to extend into 2025
Visa's shares gained a little over 21% in 2024, while Mastercard rose 23%, compared to a 25.2% rise in the benchmark S&P 500 index .SPX
"We are bullish on Mastercard's ability to accelerate the shift away from roughly $11 trillion of global cash," analysts at William Blair wrote in a note earlier in the year
Shares of American Express AXP.N surged nearly 59% YTD, outperforming rivals in 2024
AXP's affluent customer base helped the company maintain smaller provisions for credit losses than its peers who cater to a broader spectrum of customers
Several analysts lauded expense management at the company, which CFO Christophe Le Caillec labeled as 'disciplined', post their third-quarter results
Consumer bank Capital One COF.N said earlier in the year it will acquire credit card issuer Discover Financial DFS.N in an all-stock transaction valued at $35.3 billion to create a global payments giant, in what is set to reshape the payments industry
DFS gained over 53% in 2024
Visa and Mastercard have faced heightened scrutiny from regulators and lawmakers for years, battling allegations of a duopoly
(Reporting by Pritam Biswas in Bengaluru)
((Pritam.Biswas@thomsonreuters.com))
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