Earnings SeasonAfter a notable start to third-quarter earnings seasons for the largest U.S. banks -- with JPMorgan Chase ( JPM) on Friday reporting a net loss of $380 million, or 17 cents a share, springing from a provision for litigation reserves that came to $7.2 billion after tax, or $1.85 a share -- none of the large U.S. banks reported on Monday.
DiscoverDiscover's shares have returned 38% this year and trade for 10.5 times the consensus 2014 EPS estimate of $5.04. The card lender has stood out by reporting an annual growth rate of 12% for average credit card loans held on the balance sheet during August, and achieving an industry-leading efficiency ratio of 40.29% for the 12-month period ended June 30. Deutsche Bank analyst David Ho on Monday initiated his firm's coverage of Discover with a "buy" rating and a price target of $62, representing upside potential of 17% from Monday's closing share price. In a note to clients entitled "Growth is in the Cards," Ho called Discover "a compelling growth story within financials over the next consumer leveraging cycle." "We expect above average loan growth in both a sluggish macro environment and as consumer loan demand accelerates," Ho wrote, adding that the loan growth "will translate into positive EPS revisions over time from likely better than expected
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