iPhone maker Apple (NASDAQ:AAPL) is severing its credit card partnership with financial giant Goldman Sachs (NYSE:GS). As per reports, Apple has sent a term sheet to GS to end the ties within the next 12 to 15 months. The two companies rolled out the Apple Card in 2019 and a high-yielding savings account earlier this year. While Apple is terminating its partnership with GS, it does not intend to stop its Apple Card or the savings account business. Apple is seeking a new issuer to take on GS’s role.
Two leading names have emerged as potential candidates to replace Goldman Sachs. One is card processor American Express (NASDAQ:AXP), and the other is Synchrony Financial (NYSE:SYF). Amex’s chances look slimmer due to the company’s apprehensions about potential loss rates in Apple’s card program. In contrast, Synchrony is keenly interested in Apple’s credit card business and had previously been one of the initial bidders alongside GS in 2018.
The news is a relief for Goldman, which is trying to wind down its entire consumer lending business and focus on its core investment banking operations. Earlier this month, GS also disclosed plans to sell its credit card business to General Motors (NYSE:GM). Goldman Sachs’ entry into the consumer lending business set off a slew of unexpected costs and losses.
Is Apple Share a Good Buy?
With 25 Buys versus eight Hold ratings, Apple stock commands a Strong Buy consensus rating. On TipRanks, the average Apple price target of $201.99 implies 6.1% upside potential from current levels. AAPL stock has gained 53.1% so far this year.
Is GS Stock a Good Buy?
Goldman Sachs stock has a Strong Buy consensus rating based on 12 Buys and four Hold ratings. Also, the average Goldman Sachs price forecast of $392.67 implies 16.3% upside potential from current levels. GS stock has gained 3.7% in the past six months.
