Best Research Ideas

Consumer Finance: Have Your Cake and Eat It Too? Then You Better Be Focused on Funding

Jefferies assessed and ranked access to capital, liquidity, leverage and funding diversification among covered consumer finance companies to gauge the best-positioned names over the next 3-4 years. We view deposit takers such as ALLY and COF as most prepared to handle significant shifts in credit markets, while newer platforms like AFRM and UPST have reliance upon the capital markets, which increases their overall operational risk. Jefferies would expect an appreciation of these risks will be reflected in valuation over time.

John Hecht, Consumer Finance