Bank Of America Comments On Discover Financial's Positive Trends

According to Bank of America, Discover Financial Services DFS currently trades at 7x its 2012 EPS estimate, below its historical average multiple, as its credit leverage and earning potential remain under-appreciated by the Street. Bank of America said that it expects investors to focus on the credit outlook, loan growth and capital management when DFS reports Q2'11 results on Thursday, June 23. “We forecast GAAP EPS of $0.75, versus consensus of $0.70, and operating EPS of $0.53, driven by accelerated reserve releases on the back of steadily improving credit trends. The market will likely pay more attention to any revisions to the outlook for credit and additional clarity on potential share repurchases.” Discover Financial Services closed yesterday at $23.62.