Discover price target lowered to $105 from $112 at Morgan Stanley

Morgan Stanley analyst Betsy Graseck lowered the firm’s price target on Discover (DFS) to $105 from $112 and keeps an Equal Weight rating on the shares. Discover is looking for a sharp pullback in loan growth until clarity on the credit outlook emerges, the analyst noted following the company’s Q4 report. While on the call, Discover announced an agreement with Nelnet (NNI) to take on servicing of its student loans and this is a positive, a loan sale is “likely a 2H24 story,” the analyst added. While taking “a slightly more optimistic view on loan growth,” the firm is lowering its 2024 and 2025 EPS estimates by 10% and 9%, respectively.