Financial Stocks Ending Higher; Discover Gains Despite UBS Starting Coverage with Neutral Rating

By Staff,

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Top Financial Stocks

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Financial stocks are higher today with the NYSE Financial Sector Index advancing 0.7% and the S&P Financial 100 Index also gaining about 0.7%.

In company news, Credit card firm Discover Financial Services ( DFS ) rose Tuesday after analysts at UBS started the credit-card issuer with a Neutral rating and a $56 price target.

The research shop said it believes the stock is fully valued at 11 times its price to earnings, adding it will likely underperform its closest competitor Capital One Financial ( COF ), which UBS started as a Buy on Tuesday.

"While the capital management story is powerful at DFS, its earnings story remains more vulnerable to higher rates and normalizing credit costs," the UBS analysts wrote in a new research note today. "In addition, multiple expansion is unlikely as its student lending and mortgage businesses expand, while its payment services business slows."

DFS was up about 2% at $54.75 a share, just 6 cents off its intra-day high. Shares have a 52-week range of $37.24 to $56.20.

In other sector news,

(+) JPM, Reports Q4 earnings of $1.30 per share, beating Capital IQ consensus by $0.06. Adjusted EPS was $1.40, up from $1.35 in the year-ago quarter and also topping analyst estimates by $0.06 per share.

(-) BCH, Investment funds currently owning about 32.7% of the Chilean bank's stock file amended prospectus to sell 6.7 mln shares in a secondary offering. BCH will not receive any of the $335 mln in expected gross proceeds.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing Commodities
Referenced Stocks: COF , DFS

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