Keefe, Bruyette & Woods Reports On Specialty Finance (ADS, AXP, COF, DFS)

Keefe, Bruyette & Woods released an industry update for specialty finance in advance of monthly data reports from American Express, Capital One, Discover Financial, and Alliance Data Systems, expected on Tuesday the 18th. In the report, KBW recapped previous data, examined December's seasonal trends, and outlined estimates for the quarter. According to the report, favorable trends are likely to persist. KBW issued a Target Price of $88.00 per share for Alliance Data Systems ADS, noting the risk factors of “regulatory risk, economic/credit risk, concentration risk, interest rate risk, slowdown in consumer spending, and irrational competition.” KBW issued a Target Price of $60.00 per share for American Express AXP, including “a slowdown in consumer spending, potential interchange reduction from regulatory and competitive issues, economic/credit risk, interest rate risk and irrational competition” among the risk factor. KBW issued a Target Price of $47.00 per share for Capital One COF, listing “Credit risk, reliance on capital market funding, regulatory scrutiny, and vulnerability to fluctuations of macroeconomy and interest rates,” as potential risks. Finally, KBW issued a Target Price of $24.00 per share for Discover Financial Services DFS, noting that “Price Risks: Credit risk, reliance on capital market funding, regulatory scrutiny, and vulnerability to fluctuations of macroeconomy and interest Rates” may prevent DFS from reaching its target. Alliance Data Systems is currently trading at $73.24 per share, down 0.49 percent from yesterday's close. American Express is currently trading at $45.36 per share, up 0.80 percent from yesterday's close. Capital One is down 0.34 percent from yesterday's close, and is currently trading at $47.01 per share. Discover Financial Services is up 0.70 percent from yesterday's close, and is currently trading at $20.01 per share.