Capital One Upgraded
Nash upgraded Capital One to a "Buy," rating from a "Neutral" rating, while increasing his price target for the shares to $75 from $65 and leaving his 2013 earnings estimate unchanged at $6.90. Nash raised his 2014 EPS estimate by 20 cents to $7.50.
American Express Downgraded
Nash Downgraded American Express to a "Neutral" rating from a "Buy" rating, while keeping his price target for the shares at $65, saying he saw "limited upside to out-year estimates (consensus of $4.75 in 2013) given the challenging revenue environment." American Express is set to announce its fourth-quarter results on Thursday after the market close, however, the company last Thursday preannounced fourth-quarter earnings of 637 million, or 56 cents a share, declining from $1.250 billion, or $1.09 a share, in the third quarter, and $1.192 billion, or $1.01 a share, in the fourth quarter of 2012.
Discover Remains "Top Pick"
Nash said that Discover Financial remained his firm's top credit card pick, reiterating his "Buy" rating for the company, while raising his price target for the shares by $4 to $50.00. For its Nash estimates that Discover will earn $4.25 a share in fiscal 2013 (which ends on Nov. 29) and $4.40 a share in 2014. The analyst raised his fiscal 2014 EPS estimate by 10 cents "to reflect better growth," and said that "our slightly below consensus 2013 and 2014 estimates merely represent our more conservative reserve building forecasts." Nash said "we see a clear path to $4.25+ of EPS, as DFS drives best-in-class balance sheet growth and legacy credit costs stay lower for longer. Given DFS' excess capital position ($2.5bn) and robust capital generation (2.7% ROA expected in 2013), we see it as well positioned to return over 100% of its earnings in 2013 via repurchases and dividends."
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