NEW YORK (TheStreet) -- Shares of Wells Fargo (WFC) - Get Report are higher by 0.28% to $50.69 as Guggenheim analysts predict the company's rewards-driven credit card lending will hurt large general-purpose card issuers such as Capitol One Financial (COF) and Discover Financial Services (DFS), Barron's reports.
"In credit card lending, Wells Fargo's strategy is to attract new customers and gain wallet share from existing customers utilizing a rich rewards platform and integrated technology capabilities combined with its branch and digital distribution," Guggenheim analysts said after attending the Wells Fargo investor's day on Tuesday.
General-purpose cards can be used anywhere while rewards-driven credit cards allow users to gain cash back and other perks by using it at specific places.
Analysts said Wells Fargo "reinforces a rewards-driven acquisition environment across the industry," which will erode return on assets and hurt large, general-purpose card issuers like Capitol One and Discover, according to Barron's.
San Francisco-based Wells Fargo is a bank holding and financial services company.
Separately, TheStreet Ratings rated Wells Fargo as a "buy" with a score of A-.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon.
Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that that are rated.
The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and attractive valuation levels.
TheStreet Ratings feels its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: WFC