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Analysts weigh in as Discover tumbles post-earnings

Jan. 22, 2015 9:52 AM ETDiscover Financial Services (DFS) StockDFSBy: Stephen Alpher, SA News Editor7 Comments
  • "Guidance stated the revenue margin will likely be modestly down due to NIM compression, lower protection products revenue, higher rewards rate and lower payments volume," says Credit Suisse, cutting its price target to $71 from $74, and its earnings estimates. "NIM is expected to be down in 2015 due primarily to higher funding costs."
  • The team now sees 2015 EPS at $5.40 vs. $5.60 previously, and 2016 at $5.75 from $5.95.
  • Nomura maintains its Buy rating, but cuts the price target to $68 from $75, with analyst Bill Carcache believing the company may have kitchen-sinked this quarter by pulling forward much of its 2015 reserve building.
  • Buy the dip, says RBC Capital, boosting its price target to $72 and keeping the stock as a Top Pick.
  • DFS -7.5%
  • Previously: Discover -3.8% as results come up short (Jan. 21)

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