Discover Financial Services (DFS) Lowered to Hold at Zacks Investment Research
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.”
Several other analysts also recently commented on the company. Bank of America set a $80.00 price objective on Discover Financial Services and gave the company a “buy” rating in a research note on Friday, January 25th. Royal Bank of Canada initiated coverage on Discover Financial Services in a research note on Friday, May 3rd. They set an “outperform” rating and a $96.00 price objective for the company. JMP Securities upped their price objective on Discover Financial Services from $74.00 to $80.00 and gave the company a “market outperform” rating in a research note on Thursday, April 4th. Oppenheimer downgraded Discover Financial Services from an “outperform” rating to a “market perform” rating in a research note on Tuesday, May 7th. Finally, Nomura upped their price objective on Discover Financial Services from $81.00 to $86.00 and gave the company a “buy” rating in a research note on Friday, April 26th. Nine analysts have rated the stock with a hold rating and nine have assigned a buy rating to the company’s stock. Discover Financial Services has a consensus rating of “Buy” and a consensus price target of $81.69.
Discover Financial Services (NYSE:DFS) last posted its quarterly earnings data on Thursday, April 25th. The financial services provider reported $2.15 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $2.02 by $0.13. The firm had revenue of $2.76 billion during the quarter, compared to the consensus estimate of $2.76 billion. Discover Financial Services had a return on equity of 26.34% and a net margin of 20.98%. The firm’s revenue was up 7.3% compared to the same quarter last year. During the same period in the prior year, the business earned $1.82 EPS. On average, equities research analysts expect that Discover Financial Services will post 8.76 EPS for the current year.
In related news, insider David W. Nelms sold 29,300 shares of the company’s stock in a transaction that occurred on Friday, March 1st. The stock was sold at an average price of $72.46, for a total value of $2,123,078.00. Following the sale, the insider now owns 970,891 shares in the company, valued at approximately $70,350,761.86. The transaction was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. Also, CFO R. Mark Graf sold 30,741 shares of the company’s stock in a transaction that occurred on Monday, April 29th. The stock was sold at an average price of $81.92, for a total value of $2,518,302.72. Following the completion of the sale, the chief financial officer now owns 56,072 shares in the company, valued at approximately $4,593,418.24. The disclosure for this sale can be found here. Insiders have sold a total of 85,169 shares of company stock worth $6,615,921 in the last quarter. 0.81% of the stock is currently owned by insiders.
Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. BlackRock Inc. grew its holdings in shares of Discover Financial Services by 6.2% in the 1st quarter. BlackRock Inc. now owns 23,825,935 shares of the financial services provider’s stock worth $1,695,456,000 after acquiring an additional 1,399,427 shares during the period. FMR LLC grew its holdings in shares of Discover Financial Services by 1.7% in the 4th quarter. FMR LLC now owns 8,884,651 shares of the financial services provider’s stock worth $524,017,000 after acquiring an additional 150,949 shares during the period. Geode Capital Management LLC grew its holdings in shares of Discover Financial Services by 6.7% in the 1st quarter. Geode Capital Management LLC now owns 4,920,272 shares of the financial services provider’s stock worth $349,650,000 after acquiring an additional 310,872 shares during the period. JPMorgan Chase & Co. grew its holdings in shares of Discover Financial Services by 8.6% in the 1st quarter. JPMorgan Chase & Co. now owns 3,986,538 shares of the financial services provider’s stock worth $283,680,000 after acquiring an additional 316,589 shares during the period. Finally, Northern Trust Corp grew its holdings in shares of Discover Financial Services by 2.2% in the 4th quarter. Northern Trust Corp now owns 3,890,654 shares of the financial services provider’s stock worth $229,471,000 after acquiring an additional 81,970 shares during the period. Institutional investors and hedge funds own 87.79% of the company’s stock.
Discover Financial Services Company Profile
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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