Discover "remains compelling to us," because of its diversification into other unsecured loan types, Chittenden wrote, adding "data-dependent analysis and underwriting of unsecured credit to consumers is really DFS's bread and butter."
Oppenheimer estimates Discover will earn $4.79 a share this year, with EPS growing to $5.01 in 2014.
Chittenden expects Discover, over time, to "trade in line with other financial services firms," at a multiple of 11 times forward earnings, supporting his price target.
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