Stifel Nicolaus Upgrades Discover to Buy, Establishes $29 Target

Stifel Nicolaus raises its rating on Discover (NYSE: DFS) to Buy from Hold and sets a price target of $29 per share as the company continues impressive results and improves valuation.

Stifel Nicolaus writes, "In our view, DFS's fiscal 4Q11 results are further evidence that it is outperforming its peers in the credit card industry with strong credit, spending, and receivable growth trends. ... With double-dip protection from best-in-class credit and capital, macro recovery upside from a rebound in card lending, and long-term acquisition potential, we are upgrading shares to Buy with a $29 target price based on 8.0x 2013 EPS."

DFS closed at 23.07 per share on Thursday.