BMO Capital analyst James Fotheringham lowered the firm’s price target on Discover to $99 from $100 and keeps a Market Perform rating on the shares after its Q3 credit-driven earnings miss. The company also attributed its bigger-than-expected reserve build to card loan growth and the other half to macroeconomic pressures, but warns that if delinquencies fail to slow over the coming months, incremental provisions are likely, the analyst tells investors in a research note. BMO adds that while Discover tweaked its full-year guidance higher on slightly faster loan growth, its credit quality and regulatory issues remain in focus.
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