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Discover Financial (DFS) PT Cut to $68 at Nomura Post Q4; 'Buy' Maintained

January 22, 2015 9:17 AM EST
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Price: $130.68 +2.09%

Rating Summary:
    19 Buy, 16 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 11
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Nomura Securities analyst Bill Carcache lowered his price target on Discover Financial (NYSE: DFS) to $68.00 (from $75.00) following Q4 results but retained a Buy rating.

Carcache commented, "DFS reported GAAP EPS of $0.87. DFS offered incremental 2015 guidance on revenue margins, opex, and provisions. We believe that DFS pulled forward much of the reserve building that it would have had to take in 2015 into 4Q14 results. We’re lowering our 2015 / 2016 estimates to $5.45 / $5.89 (from $5.61 / $6.01) to reflect faster-than-previously expected provision expense. Our revised target price goes to $68 (from $75), which implies 12x our estimate of 2016 EPS. Despite this quarter’s miss, we continue to expect relative outperformance from DFS and are reiterating our Buy rating.

FY15E EPS maintained at $5.45; FY16E EPS at $5.89.

For an analyst ratings summary and ratings history on Discover Financial click here. For more ratings news on Discover Financial click here.

Shares of Discover Financial closed at $60.84 yesterday.



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