Discover Financial Services "overweight," estimates raised

09/26/07 - Lehman Brothers

NEW YORK, September 26 (newratings.com) - Analyst Bruce W Harting of Lehman Brothers maintains his "overweight" rating on Discover Financial Services (DFS), while raising his estimates for the company. The target price is set to $28.

In a research note published this morning, the analyst mentions that the company has reported its 3Q07 EPS ahead of the consensus and short of the estimates. Discover Financial Services’ receivables grew by 5% for the third consecutive quarter, the analyst says. Discover Financial Services has initiated a quarterly dividend of $0.06 per share, which the company is expected to hike gradually, Lehman Brothers adds. The EPS estimate for 2008 has been raised from $1.90 to $1.94 to reflect the stronger-than-expected credit trends.