Credit card issuer Discover Financial Services (
) on Monday caught some continued bullish sentiment from analysts
at Jefferies & Co.
The firm maintained its "Buy" rating on DFS and lifted its price
target from $40 to $45. That new target suggests a 17% upside to
the stock's Friday closing price of $38.62.
A Jefferies analyst commented, "The CFPB/FDIC ruling is
non-recurring and should remove a very modest overhang." On Friday,
Discover announced a settlement with the CFPB & FDIC regarding
credit protection products. The agreement includes some $200
million in customer refunds and a $14 million fine.
Continuing, the firm said "On a separate note, trends in credit
recoveries and gross charge-offs lead us to conclude credit should
continue to improve into at least through Q4'12. We expect
recoveries on charged-off accounts to mean revert later than
originally anticipated, providing slight upside to our current core
Accordingly, Jefferies lifted its earnings estimates for the
company through 2014.
Discover Financial shares were mostly flat in premarket trading
The Bottom Line
Shares of Discover Financial Reserves (
) have a 1.04% dividend yield, based on Friday's closing stock
price of $38.62. The stock has technical support in the $34 price
area. The shares are trading near all-time highs.
Discover Financial Services (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
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, as well as a detailed explanation of
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