In a report published Wednesday, Bank of America analyst Kenneth Bruce reiterated his Buy rating and $47.00 price target on Discover Financial Services DFS.
Bruce noted, “We came away from Discover's Investor Day incrementally bullish on its earnings power and potential to distribute capital to shareholders. DFS effectively raised its outlook with superior credit performance and improving funding costs continuing to fund a combination of growth investments, higher dividends and buybacks. DFS expects credit losses will normalize slowly and at the low-end of its prior guidance. Credit card loan growth is expected at the high-end of the range, which it raised. DFS highlighted initiatives to drive additional share gains, leverage its deep credit expertise to diversify its balance sheet and engage its network more fully. Challenges remain, in particular surrounding Pulse debit volumes, but we were encouraged that the favorable earnings backdrop should persist.”
Discover Financial Services closed on Tuesday at $42.13.
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