Discover Financial (NYSE:DFS) launched an affinity credit card last week in collaboration with wetland conservation organization, Ducks Unlimited.  The announcement regarding the card was made during the 75th annual convention of the nonprofit organization, which has a strong, loyal following across North America. The Ducks Unlimited Discover card will grant card holders access to ShopDiscover, an online shopping portal which offers lucrative cash back programs at more than 200 online retailers.
Mean, Clean and Evergreen
Discover Financial will allow card holders to donate any cash rewards earned through the company’s popular Cashback Bonus program to Ducks Unlimited. Through this alliance Discover hopes to attract environmentally conscious customers to adopt their credit cards. We expect Discover’s brand image to receive a boost from the alliance, leading to growth in its credit cards business, which accounts for more than 50% of our price estimate for the company’s stock.
East Meets West
Discover has grown significantly over the past few years and has plans to expand into fast growing economies in Asia. The company has forged a strategic alliance with the National Payments Corporation of India (NPCI) and plans to capitalize on the rapid growth of credit card usage in India. (See India’s Booming Card Market Attracts Discover Financial) The volume of credit card transactions in India grew 58% year-on-year last year and we expect volumes to continue to increase over the Trefis forecast period as the middle class in the country continues to flourish and spends more as their purchasing power increases.
We have a $26 price estimate for Discover Financial’s stock, which is 20% below the market price.Notes:
- Discover and Ducks Unlimited Announce New Affinity Card, May 30th, 2012 [↩]