UPDATE: Oppenheimer Initiates Discover Financial Services at Outperform on Underappreciated Growth

In a report published Thursday, Oppenheimer analyst Ben Chittenden initiated coverage on Discover Financial Services (NYSE: DFS) with an Outperform rating and $55.00 price target.

In the report, Oppenheimer noted, “We are initiating coverage of Discover Financial Services (DFS) with an Outperform rating and a $55 price target. We believe that DFS's growth is underappreciated by the market. In an environment where there hasn't been much US credit card loan growth, the company has made the decision to methodically diversify. Starting with personal loans and private student loans, Discover has identified four product types to grow into. The common thread among all of these products is that they all offer similar risk-adjusted returns to credit cards and leverage the company's analytical underwriting style. This diversification push will help it grow earnings and bridge the gap until there is faster credit card loan growth to leverage.”

Discover Financial Services closed on Wednesday at $47.47.