An analyst reiterated his "neutral" rating on Discover Financial Services after Discover reported low delinquencies for December.
The Riverwoods, Ill., credit card company released its master trust data Tuesday. Though net chargeoffs rose 16 basis points compared with November, to 4.62%, delinquencies rose just 2 basis points, to 3.84%, it said.
Craig Maurer, an analyst with Credit Agricole Group's Calyon Securities, wrote in a research note published Wednesday that the delinquency figures "are a better indicator of future credit performance," and that "it appears that Discover's management did a good job of culling bad credit risks from the portfolio over the past few years."
He wrote that delinquencies "appear to be under control," especially compared with other card companies, such as Capital One Financial Corp., whose delinquency rates rose more than 150 basis points, to 4.9%, between June and December.
At midday Discover's shares had dropped 2.27% from Tuesday's close, to $12.90.
