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UPDATE: BMO Capital Downgrades Discover Financial (DFS) to Market Perform

April 18, 2021 10:22 PM EDT
Get Alerts DFS Hot Sheet
Price: $108.54 +0.52%

Rating Summary:
    22 Buy, 11 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 11 | Down: 37 | New: 8
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(Updated - April 19, 2021 5:18 AM EDT)

BMO Capital analyst James Fotheringham downgraded Discover Financial (NYSE: DFS) from Outperform to Market Perform with a price target of $105.00.

The analyst comments "After its impressive run, we downgrade DFS on valuation exclusively; P/E and P/TCE have doubled over the past year and are now at or above historical averages. Our $105 target implies low-single-digit upside, predicated on 2.3x pro forma TCE (normalized 25% RoTCE × 8x P/E) plus $30 per share excess capital (valued at 0.5x). This is not a call on the quarter, but our 1Q21E $2.64 estimate is below consensus on higher provisions. We prefer market-oriented asset managers (KKR, APO, BEN, and VCTR) and investment banks (MS and GS)."

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 $102.00 yesterday.


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