Discover Financial Services (DFS) Stock Rating Lowered by Zacks Investment Research

Zacks Investment Research lowered shares of Discover Financial Services (NYSE:DFS) from a buy rating to a hold rating in a research note issued to investors on Monday.

According to Zacks, “Shares of the company have lost in a years’ time, narrower than its industry’s decline in the same time frame. 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 and card sales also look promising. The company's effective capital management also impresses. However, the company has been incurring costs to compete with other credit card issuers. Escalating expenses due to higher employee compensation and benefits and increase in debt level are some concerns.”

Several other research analysts also recently commented on the stock. ValuEngine raised shares of Discover Financial Services from a sell rating to a hold rating in a research note on Tuesday, November 27th. Citigroup cut their price target on shares of Discover Financial Services from $78.00 to $75.00 and set a neutral rating on the stock in a report on Thursday, November 1st. Wells Fargo & Co cut their price target on shares of Discover Financial Services from $82.00 to $78.00 and set a market perform rating on the stock in a report on Friday, October 26th. JPMorgan Chase & Co. upgraded shares of Discover Financial Services from a neutral rating to an overweight rating in a report on Tuesday, October 2nd. Finally, Bank of America lifted their price target on shares of Discover Financial Services from $86.00 to $92.00 and gave the company a buy rating in a report on Friday, September 21st. Eight research analysts have rated the stock with a hold rating, thirteen have assigned a buy rating and one has given a strong buy rating to the company. The company currently has a consensus rating of Buy and a consensus price target of $86.40.

Shares of NYSE DFS opened at $66.49 on Monday. The company has a current ratio of 1.48, a quick ratio of 1.48 and a debt-to-equity ratio of 2.58. Discover Financial Services has a 52 week low of $64.11 and a 52 week high of $81.93. The firm has a market capitalization of $22.30 billion, a P/E ratio of 11.12, a PEG ratio of 0.68 and a beta of 1.51.

Discover Financial Services (NYSE:DFS) last issued its earnings results on Thursday, October 25th. The financial services provider reported $2.05 EPS for the quarter, hitting the consensus estimate of $2.05. Discover Financial Services had a net margin of 19.51% and a return on equity of 25.49%. The company had revenue of $2.72 billion for the quarter, compared to the consensus estimate of $2.69 billion. On average, analysts anticipate that Discover Financial Services will post 7.83 earnings per share for the current fiscal year.

The business also recently declared a quarterly dividend, which was paid on Thursday, December 6th. Investors of record on Wednesday, November 21st were issued a $0.40 dividend. This represents a $1.60 annualized dividend and a yield of 2.41%. The ex-dividend date was Tuesday, November 20th. Discover Financial Services’s dividend payout ratio (DPR) is currently 26.76%.

In other news, Chairman David W. Nelms sold 30,000 shares of the business’s stock in a transaction on Monday, October 1st. The shares were sold at an average price of $77.16, for a total transaction of $2,314,800.00. Following the sale, the chairman now owns 1,180,798 shares in the company, valued at approximately $91,110,373.68. The sale was disclosed in a document filed with the SEC, which is accessible through this link. Also, SVP Edward W. Mcgrogan sold 850 shares of the business’s stock in a transaction on Thursday, November 1st. The shares were sold at an average price of $70.00, for a total transaction of $59,500.00. Following the sale, the senior vice president now owns 12,075 shares in the company, valued at approximately $845,250. The disclosure for this sale can be found here. In the last quarter, insiders sold 104,100 shares of company stock worth $7,590,463. 0.81% of the stock is currently owned by company insiders.

Several hedge funds have recently made changes to their positions in DFS. Eqis Capital Management Inc. bought a new stake in shares of Discover Financial Services during the 2nd quarter valued at $404,000. Raymond James Financial Services Advisors Inc. boosted its holdings in shares of Discover Financial Services by 76.4% during the 2nd quarter. Raymond James Financial Services Advisors Inc. now owns 65,019 shares of the financial services provider’s stock valued at $4,578,000 after buying an additional 28,163 shares in the last quarter. Alps Advisors Inc. boosted its holdings in shares of Discover Financial Services by 132.3% during the 2nd quarter. Alps Advisors Inc. now owns 9,096 shares of the financial services provider’s stock valued at $700,000 after buying an additional 5,181 shares in the last quarter. Migdal Insurance & Financial Holdings Ltd. boosted its holdings in shares of Discover Financial Services by 8,341.7% during the 2nd quarter. Migdal Insurance & Financial Holdings Ltd. now owns 2,026 shares of the financial services provider’s stock valued at $143,000 after buying an additional 2,002 shares in the last quarter. Finally, Smith Asset Management Group LP boosted its holdings in shares of Discover Financial Services by 4.6% during the 2nd quarter. Smith Asset Management Group LP now owns 308,119 shares of the financial services provider’s stock valued at $21,726,000 after buying an additional 13,472 shares in the last quarter. Hedge funds and other institutional investors own 86.26% 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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