you'd think these guys discovered a new ghetto to offer easy credit to? Nice pile-in:
stockcharts.com[w,a]daclyyay[pb50!b200][vc60][iUb14!La12,26,9]&pref=G
soon to be a pile-up?
Tuesday March 5, 1:35 pm Eastern Time
As Economy Recovers, Merrill Says Buy Credit-Card Stocks
NEW YORK -(Dow Jones)- As the curtain appears to be closing on the recession, Merrill Lynch & Co . upgraded shares of two credit-card issuers - MBNA Corp. ( KRB) and Metris Cos (NYSE: MXT - news) . Inc. (MXT) - and recommends stockpiling positions in other credit-related issues.
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Merrill Lynch analyst Michael Hughes upgraded MBNA Corp.'s (KRB) near term rating to strong buy from buy, while maintaining its long-term rating at strong buy. He also upgraded Metris Cos . Inc.'s (MXT) ratings to strong buy from buy, for both the near term and long term.
He maintained his strong buy ratings on both Capital One Financial Corp. ( COF) and Household International Inc. (HI).
"Although the stocks have had impressive bounces after trading poorly early in the year, we still believe that significant upside potential remains," particularly in the next six to 12 months, Hughes said in a research note.
He said that this group performed very well in 1996 even as credit losses were still rising. "We believe investors waiting for a loss peak may miss out on significant stock appreciation due to the market's unusual anticipation of cyclical changes," Hughes noted.
The credit card issuers posted solid gains on Monday, when hopes of an economic recovery spurred investors to buy shares.
Hughes expects Capital One to hit $71 within a year, while putting price targets for MBNA and Household at $45 and $70, respectively. Capital One was recently up $1.57, or 3%, at 56.77, while Household International fell 40 cents, or 1%, to 56.75. MBNA rose 80 cents, or 2%, to 38.26.
He believes Metris can trade at least as high as $30; shares were recently up 97 cents, or 5%, at 21.76, following a 22% surge on Monday.
-By Tara Siegel Bernard; Dow Jones Newswires
201-938-5288; tara.siegel@dowjones.com
(This story was originally published by Dow Jones Newswires)
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