Consumer finance companies' 2026 guidance could come in above Street expectations, supported by credit improvement, loan growth inflection and higher capital returns, Morgan Stanley said in a Tuesday note.

The brokerage said Capital One Financial (COF) remains its top pick, citing catalysts including a ramp in buybacks, synergies from the Discover acquisition and credit improvement tailwinds.

Apart from Capital One, the investment firm said its 2026 earnings forecasts for American Express (AXP) and Synchrony Financial (SYF) are above Street consensus. American Express could guide 2026 revenue growth between 9% and 10% and Synchrony could see low-to-mid single digit growth in period-end loan receivables, according to the note.

Morgan Stanley raised its price target for Capital One Financial to $300 from $280, with an overweight rating. The firm also increased the price target for American Express to $395 from $370, with an equal-weight rating.

Shares of Synchrony, Capital One and American Express were down 2.9%, 2.1% and 1.7% in recent trading.

Price: 358.66, Change: -6.14, Percent Change: -1.68