Discover just upgraded at BofA, here’s why

BofA upgraded Discover to Buy from Neutral with a price target of $116, up from $94. The firm believes the market is in the latter stages of the current credit cycle and expects losses to peak in the second half of 2024, noting that historically stock prices and company valuations appreciate meaningfully as peak delinquencies come into view. The firm, which thinks credit losses will increase in 2024 and macro will be a headwind, though less than it and most companies might have feared, thinks peak delinquencies could come into view in the next 3-6 months and so it thinks it is “time to get incrementally more bullish on the credit card stocks,” the analyst tells investors.