Zacks Investment Research lowered shares of Discover Financial Services (NYSE:DFS) from a hold rating to a sell rating in a report published on Tuesday, October 17th.
According to Zacks, “Discover Financial’s shares have underperformed the industry year to date. Its weak Payment Service segment continues to hurt profitability. It has also been incurring expenses in order to compete with other credit card issuers, attract and retain customers, and increase card usage from past many quarters. The company has seen the Zacks Consensus Estimate for 2017 and 2018 earnings being revised downward over the last 90 days. The company will release its third quarter results on Oct 24, 2017 after the market closes.”
Several other equities analysts also recently commented on the stock. Morgan Stanley lowered their target price on shares of Discover Financial Services from $71.00 to $70.00 and set an overweight rating on the stock in a research report on Friday, September 8th. William Blair reissued an outperform rating on shares of Discover Financial Services in a research report on Tuesday, July 18th. BidaskClub downgraded shares of Discover Financial Services from a hold rating to a sell rating in a research report on Monday, June 26th. Wells Fargo & Company initiated coverage on shares of Discover Financial Services in a report on Tuesday, October 10th. They set a market perform rating and a $69.00 price target for the company. Finally, ValuEngine cut shares of Discover Financial Services from a buy rating to a hold rating in a report on Monday, September 11th. Three research analysts have rated the stock with a sell rating, nine have given a hold rating and sixteen have assigned a buy rating to the company. The stock currently has an average rating of Hold and an average target price of $74.45.
Shares of Discover Financial Services (DFS) traded up 0.13% during mid-day trading on Tuesday, hitting $66.78. 1,713,309 shares of the company were exchanged. Discover Financial Services has a 12-month low of $55.41 and a 12-month high of $74.33. The company’s 50-day moving average price is $62.97 and its 200-day moving average price is $61.63. The firm has a market capitalization of $24.87 billion, a P/E ratio of 11.52 and a beta of 1.47.
Discover Financial Services (NYSE:DFS) last posted its earnings results on Wednesday, July 26th. The financial services provider reported $1.40 EPS for the quarter, missing the Thomson Reuters’ consensus estimate of $1.45 by ($0.05). The business had revenue of $2.42 billion for the quarter, compared to analyst estimates of $2.40 billion. Discover Financial Services had a return on equity of 20.74% and a net margin of 20.04%. The company’s quarterly revenue was up 9.2% compared to the same quarter last year. During the same period in the previous year, the company earned $1.47 earnings per share. Equities research analysts predict that Discover Financial Services will post $5.96 earnings per share for the current fiscal year.
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The company also recently disclosed a quarterly dividend, which will be paid on Thursday, December 7th. Stockholders of record on Wednesday, November 22nd will be issued a dividend of $0.35 per share. This represents a $1.40 annualized dividend and a dividend yield of 2.10%. The ex-dividend date of this dividend is Tuesday, November 21st. Discover Financial Services’s payout ratio is 24.05%.
Discover Financial Services announced that its board has authorized a stock buyback program on Tuesday, July 25th that permits the company to buyback $2.75 billion in shares. This buyback authorization permits the financial services provider to reacquire up to 11.3% of its shares through open market purchases. Shares buyback programs are typically an indication that the company’s management believes its stock is undervalued.
In other news, SVP Edward W. Mcgrogan sold 1,228 shares of the firm’s stock in a transaction that occurred on Monday, July 31st. The shares were sold at an average price of $61.06, for a total transaction of $74,981.68. Following the completion of the sale, the senior vice president now owns 13,085 shares of the company’s stock, valued at $798,970.10. The transaction was disclosed in a document filed with the SEC, which is accessible through this link. Also, CEO David W. Nelms sold 30,000 shares of the firm’s stock in a transaction that occurred on Tuesday, August 1st. The stock was sold at an average price of $61.13, for a total transaction of $1,833,900.00. Following the sale, the chief executive officer now directly owns 1,559,912 shares of the company’s stock, valued at approximately $95,357,420.56. The disclosure for this sale can be found here. In the last ninety days, insiders have sold 157,002 shares of company stock valued at $9,694,424. Company insiders own 0.96% of the company’s stock.
Institutional investors have recently modified their holdings of the stock. V Wealth Management LLC acquired a new stake in shares of Discover Financial Services in the second quarter valued at approximately $101,000. FNY Managed Accounts LLC acquired a new stake in shares of Discover Financial Services in the first quarter valued at approximately $124,000. Orrstown Financial Services Inc. increased its holdings in shares of Discover Financial Services by 16.7% in the second quarter. Orrstown Financial Services Inc. now owns 2,002 shares of the financial services provider’s stock valued at $125,000 after purchasing an additional 286 shares in the last quarter. Perigon Wealth Management LLC increased its holdings in shares of Discover Financial Services by 2.3% in the first quarter. Perigon Wealth Management LLC now owns 2,146 shares of the financial services provider’s stock valued at $147,000 after purchasing an additional 48 shares in the last quarter. Finally, Capstone Investment Advisors Netherlands B.V. acquired a new stake in shares of Discover Financial Services in the second quarter valued at approximately $157,000. 85.41% of the stock is owned by institutional investors and hedge funds.
About Discover Financial Services
Discover Financial Services (DFS) is a direct banking and payment services company. The Company is a bank holding company, as well as a financial holding company. The Company operates through two segments: Direct Banking and Payment Services. It provides direct banking products and services, and payment services through its subsidiaries.
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