JPMorgan analyst Richard Shane upgraded Discover Financial (DFS) to Overweight and raised his price target for the shares to $89 from $81. The company appears on track to execute a "soft landing" as loan growth stabilizes, Shane tells investors in a research note. The analyst says credit has outperformed expectations while multiples in the Credit Card space have compressed. This creates a more attractive opportunity for investment, according to Shane. He also raised his price target for Overweight-rated Capital One (COF) to $113 from $109 and for Neutral-rated American Express (AXP) to $115 from $105.

Reports Q1 revenue $15.8B, consensus $14.86B. "We have started 2024 off strong, with our first-quarter results reflecting the positive trends we have seen in our business the last several years," said Stephen Squeri, chairman and CEO. "Revenue increased 11 percent from a year earlier to $15.8 billion and EPS increased 39 percent to $3.33. Our continued investments in our value propositions, marketing, brand and technology capabilities have helped drive high levels of engagement with our premium customers. Overall Card Member spending grew 7 percent on an FX-adjusted basis, with spending by U.S. consumer Card Members up 8 percent from a year earlier and spending in our International Card Services segment increasing 13 percent on an FX-adjusted basis. We continue to attract high-spending, high credit-quality customers to the franchise, with new card acquisitions accelerating sequentially to 3.4 million in the quarter. Our fee-based products accounted for around 70 percent of the new account acquisitions we saw in the quarter, and we continue to see strong demand from Millennial and Gen Z consumers, who accounted for over 60 percent of new consumer account acquisitions globally. Our credit metrics remain best in class. Based on our results to date and the trends we are seeing in our business, we continue to expect full-year 2024 revenue growth of 9 percent to 11 percent and EPS of $12.65 to $13.15."

Barclays raised the firm's price target on Discover to $123 from $120 and keeps an Equal Weight rating on the shares. The company reported a solid Q1 beat and delinquencies are decelerating, the analyst tells investors in a research note.

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