Barclays Reiterates an 'Overweight' on Discover Financial (DFS); 4Q11 Preview - NCOs Nearing a Bottom

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

Barclays analyst says, "When DFS reports 4Q11 earnings on Thursday, we expect EPS of $0.99 compared to consensus of $0.90. Overall, we expect results to be highlighted by continued improvement in credit quality, while loan growth and margin should primarily be impacted by DFS's acquisition of $2.5B loans from Citi during the quarter. Excluding reserve releases, we estimate EPS of $0.78."

"As we look toward 2012, we would not be surprised if 4Q11 is the bottom for NCOs, but expect losses and provisions to remain below 'normal' for the near future and are raising our 2012 EPS estimate slightly to $3.35 to reflect better-than-expected credit trends."

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 $24.21 yesterday.

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