According to Zacks, “Discover Financial’s shares have outperformed the industry year to date. Its strong Direct Banking business has significantly supported its top line. The company’s loan and Payment Services transaction, dollar volume growth and card sales also look promising. The company's effective capital management impresses investors. Revenues of the company have been rising over the past few years, mainly driven by higher net interest incomes and other total income of the company. However, it has been incurring costs to compete with other credit card issuers. Escalating expenses, high provision for losses, and increase in debt level are some headwinds.”
DFS has been the topic of a number of other research reports. CIBC reissued a market perform rating on shares of Discover Financial Services in a research note on Tuesday, May 7th. Compass Point set a $74.00 price target on Discover Financial Services and gave the stock a hold rating in a research note on Friday, January 25th. ValuEngine raised Discover Financial Services from a sell rating to a hold rating in a research note on Friday, March 15th. Goldman Sachs Group raised Discover Financial Services from a neutral rating to a buy rating and lifted their price target for the stock from $51.00 to $56.00 in a research note on Friday, May 3rd. Finally, Oppenheimer set a $79.00 price target on Discover Financial Services and gave the stock a buy rating in a research note on Wednesday, April 17th. Nine research analysts have rated the stock with a hold rating and nine have assigned a buy rating to the stock. The stock has an average rating of Buy and a consensus price target of $81.69.
Discover Financial Services (NYSE:DFS) last issued its quarterly earnings results on Thursday, April 25th. The financial services provider reported $2.15 EPS for the quarter, topping the consensus estimate of $2.02 by $0.13. Discover Financial Services had a net margin of 20.98% and a return on equity of 26.34%. The firm had revenue of $2.76 billion for the quarter, compared to analysts’ expectations of $2.76 billion. During the same period in the previous year, the business earned $1.82 earnings per share. Discover Financial Services’s revenue for the quarter was up 7.3% compared to the same quarter last year. As a group, analysts predict that Discover Financial Services will post 8.76 earnings per share for the current year.
The firm also recently announced a quarterly dividend, which will be paid on Thursday, June 6th. Shareholders of record on Friday, May 24th will be paid a dividend of $0.40 per share. The ex-dividend date of this dividend is Thursday, May 23rd. This represents a $1.60 annualized dividend and a yield of 2.04%. Discover Financial Services’s dividend payout ratio (DPR) is presently 20.54%.
In other Discover Financial Services news, Director Cynthia A. Glassman sold 5,551 shares of Discover Financial Services stock in a transaction dated Monday, April 29th. The stock was sold at an average price of $81.73, for a total transaction of $453,683.23. Following the transaction, the director now owns 44,481 shares of the company’s stock, valued at approximately $3,635,432.13. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, CFO R. Mark Graf sold 30,741 shares of Discover Financial Services stock in a transaction dated Monday, April 29th. The shares were sold at an average price of $81.92, for a total value of $2,518,302.72. Following the transaction, the chief financial officer now directly owns 56,072 shares in the company, valued at approximately $4,593,418.24. The disclosure for this sale can be found here. In the last ninety days, insiders have sold 85,169 shares of company stock worth $6,615,921. Company insiders own 0.81% of the company’s stock.
A number of large investors have recently added to or reduced their stakes in DFS. JPMorgan Chase & Co. grew its stake in shares of Discover Financial Services by 1.1% in the 3rd quarter. JPMorgan Chase & Co. now owns 3,717,616 shares of the financial services provider’s stock valued at $284,212,000 after buying an additional 39,555 shares in the last quarter. Teachers Advisors LLC grew its stake in shares of Discover Financial Services by 2.5% in the 3rd quarter. Teachers Advisors LLC now owns 912,537 shares of the financial services provider’s stock valued at $69,763,000 after buying an additional 22,144 shares in the last quarter. Virtu Financial LLC grew its stake in shares of Discover Financial Services by 233.9% in the 4th quarter. Virtu Financial LLC now owns 12,748 shares of the financial services provider’s stock valued at $752,000 after buying an additional 8,930 shares in the last quarter. Bank of Montreal Can grew its stake in shares of Discover Financial Services by 15.5% in the 4th quarter. Bank of Montreal Can now owns 2,673,874 shares of the financial services provider’s stock valued at $157,705,000 after buying an additional 357,962 shares in the last quarter. Finally, BB&T Corp grew its stake in shares of Discover Financial Services by 2.0% in the 4th quarter. BB&T Corp now owns 418,488 shares of the financial services provider’s stock valued at $24,682,000 after buying an additional 8,239 shares in the last quarter. 87.79% of the stock is currently owned by institutional investors.
About Discover Financial Services
Discover Financial Services, through its subsidiaries, operates as a direct banking and payment services company in the United States. The Direct Banking segment offers Discover-branded credit cards to individuals; and other consumer products and services, including private student loans, personal loans, home equity loans, and other consumer lending, as well as deposit products, such as certificates of deposit, money market accounts, savings accounts, checking accounts, and individual retirement arrangement certificates of deposit.
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