Discover Financial (DFS) PT Raised to $150 at Jefferies

Jefferies analyst John Hecht raised the price target on Discover Financial (NYSE: DFS) to $150.00 (from $145.00) while maintaining a Buy rating.

The analyst commented: "Our quarterly estimates are shown below in Exhibit 35. We expect 8.2% Y/Y receivables growth based on recent trust data through May and typical seasonal patterns. Our provision forecast of $1.66B aligns with the consensus. We expect operating expenses of $1.57B, up 12% Y/Y, which aligns with the consensus. Our EPS forecast of $3.00 aligns with the street at $3.02. With 2Q results, we will focus on credit trends, timing and details of the student loan portfolio sale, any updates on management changes, color on the COF acquisition, guidance updates, and progress on legacy compliance matters. On July 1st, DFS reached a settlement agreement with merchants affected by the card product misclassification. The agreement is subject to court and other approvals. As of 1Q24 DFS had increased its liability estimate to $1.2B concerning the misclassification and expects all payments under the new settlement to be covered by this amount."

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