UPDATE: Nomura Raises PT on Discover Financial Services on Good Market Position

In a report published Wednesday, Nomura analyst Bill Carcache reiterated a Buy rating on Discover Financial Services (NYSE: DFS), and raised the price target from $50.00 to $54.00.

In the report, Nomura noted, “Some investors remain optimistic that this year's strong market returns are a function of an improving economy, while others take a more skeptical view that the rally has been fueled by nothing more than multiple expansion. Looking ahead, we see DFS as well-positioned to outperform regardless of whether markets move higher or pull back. Since the financial crisis, the market has attempted to “normalize” credit and NIM expectations, but it's consistently been too conservative. We're raising our estimates to reflect industry trends that suggest reserve builds will be more gradual than we previously expected. We're also raising our price target to $54, which is based on 11x our estimate of 2014 earnings. In our view, an 11x multiple is appropriate for DFS based on a 10x baseline and our view that DFS deserves 1x of credit for the network.”

Discover Financial Services closed on Tuesday at $48.31.