Stock price when the opinion was issued
You have to start with a top-down analysis. Do you like financials? He can make a great case that financials will be much higher 5-10 years down the road. Remember, this is one sector that has never come back from the peaks that they held before the 2008 subprime crisis, so valuations generally are low. Also, it is one of the few groups that can benefit from higher interest rates. He feels this one has an excellent franchise. They are with the credit cards which is a growing way people pay worldwide. They also have some great individual banks.
*Short*. The Company derives a good chunk of its revenue through its credit card business of about 40%, and its auto financing business, another 20%. Of that business, approximately one 3rd is subprime. One weak link in the US market is the subprime market where delinquencies and some of the charges are going to increase. Dividend yield of 2.1%. Thinks the stock can trade down to $59. (Analysts’ price target is $98.)
Decent sized regional US bank with credit cards being a big part of their business. Attractive share price. Trading at about 11X forward earnings. When and if short-term interest rates go up in the US, earnings will grow at a very decent clip. A very strong bank with a very attractive position in the credit card industry. Dividend yield of 1.79%.