Wolfe Research downgraded Discover Financial (DFS) to Peer Perform from Outperform without a price target saying the pending takeover by Capital One (COF) should close. The firm acknowledges the political uncertainty associated with getting a large deal approved, but sees no fundamental reason behind why regulators would prevent the acquisition of Discover from proceeding. The Discover network does not have market power of any kind and the combination does nothing to increase the level of systemic risk in the financial system, the analyst tells investors in a research note.
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