Back to top

Bull of the Day

We are upgrading our recommendation on Discover Financial Services (DFS) from Neutral to Outperform based on the acquisition of Student Loan Corp. that would enhance its already strong student loan portfolio. Additionally, Discover's fourth quarter earnings were substantially ahead of the Zacks Consensus Estimate.

The growth in the loan loss reserve release as well as gains from the payments business drove the credit card sales volumes. In addition, higher consumer spending and merchant acceptance also contributed to the increase. However, the CARD Act and the proposed limit on debit interchange fees by the Fed, along with higher-than-expected expenses is expected to hurt the profits of the company in the future.

Nevertheless, the company's extensive network, sound capital position and cost containment initiatives will help accentuate growth over the long term. Our six-month target price of $26.00 equates to 12.9x our earnings estimate for 2011. Given the expected annual cash dividend of $0.08, this price target implies an expected total return of 20.0% over that period.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CENTURY ALU… CENX 22.53 +4.50%
ERBA DIAGNO… ERB 2.91 +4.30%
PLANAR SYST… PLNR 4.31 +3.86%
MALLINCKROD… MNK 72.17 +3.83%
GTT COMMUNI… GTT 12.06 +3.52%