Bank of America Raises Discover Financial Estimates

Bank of America is raising its estimates on Discover Financial Services DFS. “Revising our 2011 GAAP EPS estimate to $3.60 from $2.91, to reflect lower credit losses and an accelerated reserve release,” Bank of America writes. “Q2'11 loss rates were 0.25% better than our prior forecast. “We are also raising our operating EPS forecast for 2011- 2013 to $2.47, $3.12 and $3.45, respectively, to reflect better credit trends with trough credit card loss rates of 4.25% versus 4.5% previously. Lower credit card losses and the expansion into student loans will likely drive consolidated chargeoffs below 4% by the end of 2012 from 5.6% currently, based our estimates.” Discover Financial Services closed Monday at $25.21.