2Q Preview: looking for clues for what 2H will bring in 2Q earnings

Research evidence excerpt

2Q Preview: looking for clues for what 2H will bring in 2Q earnings

cro and consumer health commentary will be an important thread across all names in BofAS

our coverage, as investors think about how to calibrate 2H expectations. Beyond that, on +1lawrence.aydlettjr@bofa.com646 855 1829

a by stock basis, the most important item varies. At COF, focus will continue to be on

progress on the Discover integration (making sure milestones are on track), and capital

return. For AXP, Billings outlook matters most and we think there is a chance guidance Exhibit 1: We are below the street for all

is improved. Growth metrics will be key at SYF, though we also expect much attention card issuers on 2Q EPS

be on NIM this quarter given the seasonal step down. At BFH, we are expecting an BofA vs. Consensus 2Q EPS

improvement to the credit guidance and investors will also focus on loan growth outlook

BofAe Consensus

for 2H. See Exhibit 2 for PO changes and see inside for more details on each company. AXP $4.35 $4.42

COF $4.64 $4.81

High conviction into 2Q: AXP SYF $2.10 $2.14

With a potential guidance raise on the horizon and strong commentary about quarter-to- BFH $2.52 $2.73

date performance, we see AXP as the most well-positioned to outperform this earnings OMF $1.84 $1.92

SOFI $0.12 $0.12

season. We think as long as the top-line guide is raised or narrowed at the upper end,

Source: BofA Global Research estimates, Visible Alpha

investors will accept higher full-year marketing expense and a higher full-year VCE ratio, BofA GLOBAL RESEARCH

(particularly as higher VCEs are coming from higher engagement on cornerstone

categories like Platinum and travel). AXP will also has a benefit from GBT sale offsetting

the increased marketing investments. Exhibit 2: Tweaking POs for AXP, COF,

BFH