UPDATE: J.P. Morgan Downgrades Discover Financial Services on Fair Valuation

In a report published Tuesday, J.P. Morgan analyst Richard Shane downgraded Discover Financial Services DFS from Overweight to Neutral, but raised the price target from $50.00 to $54.00.

In the report, J.P. Morgan noted, “We lower our rating to Neutral from Overweight on DFS as we believe the company is fairly valued at 10.0x our estimated 2015 EPS. We believe we will continue to see strong performance from DFS, and that it will meet long-term credit card growth targets of 2-4%. We are also positive on the mortgage origination and student lending businesses as alternative growth channels. In addition, DFS could enhance shareholder returns by repurchasing shares under the current authorization or upping dividend payments.”

Discover Financial Services closed on Monday at $50.28.