Deutsche Bank says its positive on credit card stocks into the Q2 reporting season and highlights American Express (AXP) and Synchrony Financial (SYF) as its top picks. The firm views the recent pullback in shares of American Express as an attractive opportunity and expects Synchrony's card volumes in Q2 to benefit from elevated private label card promotions. Deutsche points out that Capital One (COF) has been the best performer since the Q1 results of the names it covers, so upside may be more limited. It has Buy ratings on Capital One, American Express, Synchrony Financial and Ally Financial (ALLY).

Reports Q1 revenue $9.4B, consensus $9.34B.

BMO Capital analyst James Fotheringham raised the firm's price target on Synchrony to $41 from $40 and keeps a Market Perform rating on the shares after its Q1 earings beat. The company's lower-than-previously modeled RSA payments more than offset higher expected credit and operating costs, the analyst tells investors in a research note.

Says receivables growth consistent with expectations, payment rate slightly lower than expectations and purchase volume below expectations. Says net interest income growth higher than expectations due to lower than expected payment rate and lower than expected deposit betas. Says credit, RSA and other expense largely in-line with expectations. Says expects typical seasonality in purchase volume, loan receivables, net interest income and in credit performance. Says expects net charge-offs to peak mid-year. Says expects reserve coverage at year-end to be lower than '23 year-end rate. Says expects RSA to align to program performance and function as designed. Comments taken from Q1 earnings conference call.

Reports Q1 revenue $4.8B, consensus $4.45B. Reports Q1 CET1 capital ratio 12.6%. Reports Q1 net charge-offs 6.31%. "Synchrony's first quarter performance highlights the resiliency of our business model and focus on delivering sustainable, strong results for each of our stakeholders," said Brian Doubles, Synchrony's President and Chief Executive Officer.

Wells Fargo raised the firm's price target on American Express to $265 from $250 and keeps an Overweight rating on the shares. The firm sees a good case for management to express greater confidence in or lean to the upper end of the EPS or revenue guide for 2024. With the macro haze fading, Wells believes investors will come away with a greater appreciation of the competitive position and moat.