Zacks Investment Research upgraded shares of Discover Financial Services (NYSE:DFS) from a hold rating to a buy rating in a research report report published on Friday morning. The brokerage currently has $87.00 price objective on the financial services provider’s stock.
According to Zacks, “Discover Financial’s shares have gained against its industry’s decline in a year’s time. Moreover, it has witnessed its 2018 and 2019 earnings estimates move upward over the past 30 days. The company is well-poised for long-term growth on the back of a consistent rise in revenues. Its strong Direct Banking business has significantly supported the top line. The loan and Payment Services transaction dollar volume growth also look promising. Card sales have been soaring over the past many years. Its efficient capital management is also impressive. However, the company has been incurring considerable expenses in order to compete with other credit card issuers, attract and retain customers as well as increase the card usage from the past quarters. Rising expenses and increase in debt level have been weighing on the company’s margins.”
A number of other equities analysts have also recently issued reports on DFS. Sandler O’Neill reaffirmed a buy rating and issued a $87.00 target price on shares of Discover Financial Services in a report on Friday, July 27th. JPMorgan Chase & Co. upped their target price on Discover Financial Services from $78.00 to $81.00 and gave the stock a neutral rating in a report on Friday, July 27th. Bank of America upped their target price on Discover Financial Services from $86.00 to $92.00 and gave the stock a buy rating in a report on Friday, September 21st. Finally, Wells Fargo & Co upped their target price on Discover Financial Services from $76.00 to $82.00 and gave the stock a market perform rating in a report on Monday, October 1st. Eight investment analysts have rated the stock with a hold rating, fifteen have given a buy rating and one has issued a strong buy rating to the stock. Discover Financial Services currently has an average rating of Buy and an average price target of $86.76.
Discover Financial Services (NYSE:DFS) last issued its earnings results on Thursday, July 26th. The financial services provider reported $1.91 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.88 by $0.03. Discover Financial Services had a return on equity of 24.25% and a net margin of 19.07%. The business had revenue of $2.60 billion during the quarter, compared to analysts’ expectations of $2.63 billion. During the same quarter in the prior year, the firm earned $1.40 EPS. The business’s revenue for the quarter was up 7.6% compared to the same quarter last year. As a group, research analysts forecast that Discover Financial Services will post 7.81 earnings per share for the current fiscal year.
Discover Financial Services announced that its Board of Directors has authorized a stock repurchase plan on Thursday, July 19th that authorizes the company to repurchase $3.00 billion in shares. This repurchase authorization authorizes the financial services provider to buy up to 11.9% of its shares through open market purchases. Shares repurchase plans are typically an indication that the company’s management believes its stock is undervalued.
In related news, CEO David W. Nelms sold 30,000 shares of the firm’s stock in a transaction that occurred on Tuesday, September 4th. The stock was sold at an average price of $78.11, for a total transaction of $2,343,300.00. Following the completion of the sale, the chief executive officer now owns 1,210,798 shares of the company’s stock, valued at $94,575,431.78. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, EVP Carlos Minetti sold 3,750 shares of the firm’s stock in a transaction that occurred on Wednesday, August 1st. The stock was sold at an average price of $71.60, for a total value of $268,500.00. Following the sale, the executive vice president now directly owns 137,602 shares of the company’s stock, valued at approximately $9,852,303.20. The disclosure for this sale can be found here. In the last three months, insiders sold 101,250 shares of company stock valued at $7,663,313. Insiders own 0.81% of the company’s stock.
A number of hedge funds and other institutional investors have recently added to or reduced their stakes in DFS. Sandy Spring Bank grew its stake in Discover Financial Services by 181.5% during the second quarter. Sandy Spring Bank now owns 1,689 shares of the financial services provider’s stock worth $119,000 after purchasing an additional 1,089 shares during the period. Migdal Insurance & Financial Holdings Ltd. grew its stake in Discover Financial Services by 8,341.7% during the second quarter. Migdal Insurance & Financial Holdings Ltd. now owns 2,026 shares of the financial services provider’s stock worth $143,000 after purchasing an additional 2,002 shares during the period. Private Capital Group LLC grew its stake in Discover Financial Services by 8,258.3% during the first quarter. Private Capital Group LLC now owns 2,006 shares of the financial services provider’s stock worth $144,000 after purchasing an additional 1,982 shares during the period. Edge Wealth Management LLC acquired a new stake in Discover Financial Services during the second quarter worth approximately $155,000. Finally, Moneta Group Investment Advisors LLC grew its stake in Discover Financial Services by 440.1% during the second quarter. Moneta Group Investment Advisors LLC now owns 6,670 shares of the financial services provider’s stock worth $157,000 after purchasing an additional 5,435 shares during the period. 85.80% of the stock is owned by institutional investors and hedge funds.
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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