December 26, 2012 at 08:35 AM EST
Sterne Agee Reaffirms Rating on Discover (DFS)

Sterne Agee Group reported on Wednesday that they have maintained their rating for payment services company, Discover Financial Services(DFS).

The firm reported that they have reaffirmed their “Buy” rating and $45 price target for DFS. This price target suggests a 14% increase over the stock’s current price of $38.51.

An analyst from the firm commented, “we are lowering our 2013 and 2014 EPS estimates to reflect higher marketing and other operating cost. We have been assuming regular reserve building (vs. releases) in 2013 and 2014 already. We are reducing the FY13 EPS from $4.50 to $4.40 and lowering the FY14 EPS estimate from $4.75 to $4.60. We are initiating quarterly 2014 EPS estimates. The pending change to a December fiscal year (not reflected below) is not expected to have much of an impact on EPS estimates.”

Discover shares were mostly flat during premarket trading Wednesday. The stock is up 60% YTD.

The Bottom Line
Shares of Discover Financial Services (DFS) have a 1.45% dividend yield, based on Monday’s closing stock price of $38.51. The stock has technical support in the $36-$38 price area. The stock is trading near all-time highs.

Discover Financial Services[[Dis not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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