Morgan Stanley's Views on Discover Financial Services are Reinforced by Investor Day

In a report published Friday, Morgan Stanley analyst Betsy L. Graseck reiterated an Overweight rating and $66.00 price target on Discover Financial Services DFS. In the report, Morgan Stanley noted, “DFS has been actively increasing the duration of liabilities to be more asset sensitive (extended effective duration of funding by 3 years in 2013). As interest charge-offs remain low, higher APR balances attrite slower, and deposit costs continue to decline, we expect NIM remains relatively steady at 9.83% in 2014 vs. 9.81% in 4Q13, and declines to 9.73% in 2015 as the benefit from lower funding costs fades and loans mix shift toward lower yielding non-card loans.” Discover Financial Services closed on Thursday at $56.48.
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Posted In: Analyst ColorReiterationAnalyst RatingsBetsy L. GraseckMorgan Stanley
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