|Discover, MasterCard and Visa stocks hit 52-week highs Friday.|
Visa The credit card company is expected to report its fourth-quarter earnings on Feb. 8. Analysts, on average, anticipate earnings of $1.45 a share on revenue of $2.47 billion. "We anticipate both V and MA will reiterate guidance (including V's expectation for P&L growth re-acceleration in F13), but we continue to believe there is a higher probability that V will raise guidance over the next couple of quarters than MA, since V's guidance extends only through F12 (MA is through F13), and we believe V's guidance had a conservative bent when it was initially provided following release of the final Fed Durbin rules last summer," Jefferies analysts wrote in a report on Jan. 26. Shares of Visa rose to $107.82 on Friday. The stock's 52-week low of $70.45 was set on March 15. In the consumer finance sector, the average estimated price-to-earnings ratio for next year is 10.79. Visa's forward P/E of 15.76 tops the average. Thirty-three of the 40 analysts who cover Visa rated it a buy. The remainder said it was a hold. TheStreet Ratings gives Visa an A grade with a buy rating and $125.82 price target. The stock has risen 5.35% year to date.
Discover The credit card company is scheduled to report first-quarter earnings on March 21. Analysts, on average, anticipate earnings of 87 cents a share on revenue of $1.84 billion. Discover filed a 10-K on Jan. 26 discussing its fee-based products and marketing practices. Keefe, Bruyette & Woods analysts said in a report that "The Consumer Financial Protection Bureau (CFPB) will now join the FDIC (vs. just the FDIC previously) to take a joint enforcement action against Discover Bank with regards to its marketing practices around its fee-based products, including its payment protection fee product. The company noted that it has made changes to both its fee-based products and program prior to the FDIC's and the CFPB's review and believes its current business practices substantially address the regulators' concerns. However, the enforcement action could include civil monetary penalties, significant restitution and additional business practice changes." Shares of Discover rose to $28.32 on Friday. The stock's 52-week low of $20.23 was set on Feb. 4, 2011. Discover's forward P/E of 8.31 is below the sector average at 10.79. Seventeen of the 26 analysts who cover Discover rated it a buy; nine categorized it a hold. TheStreet Ratings gives Discover an A- grade with a buy rating and $36.70 price target. The stock has risen 17.67% year to date.