Barclays starts U.S. consumer finance with Neutral industry view

Barclays last night initiated coverage of 22 stocks within U.S. consumer finance with a Neutral industry view. The analyst is taking a selective stance, balancing the uncertainty around the macro and rate outlook with discounted valuations. The firm’s preferred names on the lending side have attractive total return potential or growth characteristics that can persist through the cycle. On mortgage, it favors balanced business models or stocks that have credit tailwinds. Barclays also likes the aircraft lessors and believes they benefit from a combination of cyclical and secular tailwinds along with cheap valuations. Barclays put Overweight ratings on nine stocks: American Express (AXP), OneMain Holdings (OMF), SLM (SLM), PennyMac Financial (PFSI), Mr. Cooper (COOP), Essent Group (ESNT), NMI Holdings (NMIH), AerCap (AER) and Air Lease (AL). The firm put Underweight ratings on three stocks: Rocket Companies (RKT), UWM Holdings (UWMC) and Bread Financial (BFH).