UPDATE: Nomura Raises PT on Discover Financial Services on Positive Outlook

In a report published Wednesday, Nomura analyst Bill Carcache reiterated a Buy rating on Discover Financial Services DFS, and raised the price target from $54.00 to $57.00.

In the report, Nomura noted, “Excluding special items, we estimate that core EPS came in at $1.17 compared to consensus of $1.09. We expect consensus estimates to move higher on the back of this quarter's beat and are raising our estimates to reflect the combination of a better-than-previously expected NIM trajectory and lower-than-previously-expected reserve builds in 2H13. Net interest margins increased to 9.44% in 2Q13, up from 9.39% last quarter. We now expect NIMs to increase an additional 13bps throughout the rest of the year. Delinquency trends through June suggest that NCO rates will remain near all-time lows at least through the rest of 2013. We feel good about the effectiveness and efficiency of DFS's marketing investments given its high ROEs and low cost per account acquired.”

Discover Financial Services closed on Tuesday at $50.71.