Barclays Reiterates an 'Overweight' on Discover Financial (DFS); October Trust Data: Delinquencies Outpace Seasonal, but NCOs Tick up

Barclays reiterates an 'Overweight' on Discover Financial (NYSE: DFS) price target of $30.00.

Barclays analyst says, "DFS reported October credit card master trust data, which showed continued improvement in delinquencies (-2 bps m-o-m to 2.48%), but a slight increase in NCOs (+9 bps to 3.26%). The decline in delinquencies was slightly better than our expectations for a 1 bp decline and was 7 bps better than historical seasonal trends. The rise in NCOs was worse than our expectations for a 14 bps decline, but we note that any given month can be noisy and that the falling delinquencies should be a positive sign for future NCO performance. Through the first two months of DFS's fiscal 4Q, credit card trust NCOs have averaged 3.2%, well below DFS's 4.7% allowance for credit card losses, suggesting reserve releases should continue to be a meaningful contributor to earnings and capital growth in 4Q."

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 $24.56 yesterday.

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