2015 All-America Research Team: Consumer Finance, No. 2: Moshe Orenbuch
Moshe Orenbuch of Credit Suisse notches his sixth straight No. 2 finish.
First-place appearances: 0
Total appearances: 11
Analyst debut: 2005
Moshe Orenbuch of Credit Suisse notches his sixth straight No. 2 finish, solidifying his position as “the dean of the credit card and payment network analysts,” as one money manager affirms. “If anyone has a question about industry structure, history, mechanics or managements, they would be well advised to call Moshe.” The prospects for credit card providers are mixed, observes Orenbuch, 51. Some are poised to expand, such as Discover Financial Services; while others, including New York’s American Express Co., “appear to be challenged,” he says. He forecasts significant upside for Riverwoods, Illinois–based Discover, deeming it “best positioned, as it enjoys strong balance growth, credit quality and the highest buyback levels among issuers.” Moreover, the provider’s “brand name and quality of product have allowed it to attract cardholders with high retention rates,” the researcher notes. “As interest rates return to more normalized levels, we believe companies that have emphasized balance growth will earn better returns than peers that have emphasized transactors.” Discover’s stock closed at $52.26 in mid-September, and he believes that a price of $71 is justified. Also preferred in the credit card space is private label issuer Synchrony Financial of Stamford, Connecticut. “The company has met or exceeded every target they set, and growth is improving,” Orenbuch explains, citing second-quarter overall and retail card loan gains that surpassed his projections. “Management highlighted that they will continue to grow organically and that excess capital could be used for acquisitions similar to their core business.” At $39, his price objective for Synchrony represents a 27.6 percent upside to the shares’ value in mid-September.