BUZZ-Barclays upgrades Capital One and Discover to 'overweight' rating

** Barclays upgrades payment firms Capital One COF.N and Discover Financial Services DFS.N to "overweight" from "equal weight" rating

** Brokerage says likelihood of COF and DFS merger has increased

** Barclays expects the merger to close in early 2025

** Last year in February, COF said it will acquire DFS in an all-stock transaction valued at $35.3 bln

** Even without the deal, the brokerage expects COF and DFS to trade at the high end, helped by improving credit outlook and built up of excess capital

** As of last close, COF and DFS stocks were up ~1.2% and ~1.6% YTD, respectively

(Reporting by Prakhar Srivastava in Bengaluru)

((Prakhar.srivastava2@thomsonreuters.com))