2Q26 Consumer Finance Preview: Still Resilient

Research evidence excerpt

2Q26 Consumer Finance Preview: Still Resilient

Idea

July 20, 2026 04:02 AM GMT

Morgan Stanley & Co. LLCMConsumer Finance | North America Jeffrey Adelson, CFA

Equity Analyst

2Q26 Consumer Finance Jeff.Adelson@morganstanley.comJoseph Leeman +1 212 761-1761

Research Associate

Joseph.Leeman@morganstanley.com +1 212 761-4381

Preview: Still Resilient

Consumer Finance

North America

What’s Changed Industry View In-Line

SLM Corp (SLM.O) From To

Price Target $27.00 $28.00

UWM Holdings Corp (UWMC.N)

Price Target $5.00 $3.00

Bread Financial Holdings, Inc. (BFH.N)

Price Target $98.00 $102.00

Credit set for another beat amid benign card losses, faster loan

growth/consumer spend is coming through, and capital return is

rising. Tactical plays into the qtr: COF, SLM, RKT. ALLY likely

beats in 2Q, but watchful of forward NIM commentary amid

recent CD pricing, hikes priced into fwd curve.

Credit poised for another 2Q beat; card trends remain benign. Credit performance

appears set to outperform consensus again in 2Q, with consumer resilience holding

through quarter-end. Large Cap Bank read-throughs and June Master Trust data

point to further y/y improvement in both delinquencies and net charge-offs (with y/y

DQ improvement accelerating), also outperforming normal seasonality. Some of this

reflects stronger tax refunds, however the bulk appears to be general consumer

resilience as well as several years of more prudent lending standards by the banks.

Data this quarter has shown little evidence of consumer stress following the March/

April spike in gas prices. By company, we expect BFH NCOs to outperform

Consensus by 10bps, as June NCOs likely outperformed prior guidance for flat m/m.

We also expect COF US Card NCOs to beat consensus by 10bps. SYF should be

more in-line.