Discover Financial Services (DFS) Lowered to Hold at Zacks Investment Research

Zacks Investment Research downgraded shares of Discover Financial Services (NYSE:DFS) from a buy rating to a hold rating in a research report sent to investors on Wednesday.

According to Zacks, “In the last six months, Discover Financial’s shares have outperformed the industry. The company is well poised for long-term growth on the back of consistent rise in revenues. Its strong Direct Banking business has significantly supported the top line. The company’s card sales have been soaring over past many years. Its efficient capital management also impresses. However, it has been incurring considerable expenses in order to compete with other credit card issuers, attract and retain customers, and increase card usage. The rising expenses have been severely weighing on the company’s margins. Its Payments Service segment has been a drag over the past few years despite management’s several corrective efforts. The company will release fourth quarter results after market closes on Jan 24, 2017.”

Several other analysts have also weighed in on the stock. Morgan Stanley decreased 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. BMO Capital Markets reduced their price target on shares of Discover Financial Services from $69.00 to $67.00 and set a market perform rating on the stock in a research report on Wednesday, October 25th. Bank of America boosted their price target on shares of Discover Financial Services from $67.00 to $69.00 and gave the company a neutral rating in a research report on Wednesday, October 25th. Royal Bank of Canada restated a buy rating and issued a $86.00 price target on shares of Discover Financial Services in a research report on Wednesday, October 25th. Finally, Wells Fargo & Co initiated coverage on shares of Discover Financial Services in a research report on Tuesday, October 10th. They issued a market perform rating and a $69.00 price target on the stock. Two research analysts have rated the stock with a sell rating, five have assigned a hold rating and eighteen have issued a buy rating to the company. Discover Financial Services presently has a consensus rating of Buy and an average price target of $78.24.

Shares of Discover Financial Services (NYSE DFS) traded down $0.09 during trading on Wednesday, hitting $78.16. 1,593,000 shares of the stock traded hands, compared to its average volume of 2,025,972. The company has a debt-to-equity ratio of 2.52, a quick ratio of 1.55 and a current ratio of 1.55. Discover Financial Services has a 1-year low of $57.50 and a 1-year high of $78.83. The firm has a market cap of $28,401.86, a price-to-earnings ratio of 13.43, a P/E/G ratio of 1.80 and a beta of 1.52.

In other Discover Financial Services news, CEO David W. Nelms sold 30,000 shares of the business’s stock in a transaction dated Wednesday, November 1st. The shares were sold at an average price of $66.80, for a total value of $2,004,000.00. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Also, CFO R. Mark Graf sold 16,503 shares of the business’s stock in a transaction dated Friday, October 27th. The stock was sold at an average price of $66.67, for a total transaction of $1,100,255.01. Following the completion of the transaction, the chief financial officer now directly owns 82,402 shares of the company’s stock, valued at $5,493,741.34. The disclosure for this sale can be found here. Over the last ninety days, insiders sold 179,277 shares of company stock valued at $12,673,925. Insiders own 0.96% of the company’s stock.

Several hedge funds and other institutional investors have recently made changes to their positions in DFS. Diamond Hill Capital Management Inc. raised its stake in shares of Discover Financial Services by 97.6% during the third quarter. Diamond Hill Capital Management Inc. now owns 7,035,035 shares of the financial services provider’s stock worth $453,619,000 after buying an additional 3,475,126 shares during the last quarter. NorthCoast Asset Management LLC bought a new stake in shares of Discover Financial Services during the second quarter worth approximately $1,535,000. TD Asset Management Inc. raised its stake in shares of Discover Financial Services by 71.9% during the third quarter. TD Asset Management Inc. now owns 1,975,814 shares of the financial services provider’s stock worth $127,401,000 after buying an additional 826,606 shares during the last quarter. Stifel Financial Corp raised its stake in shares of Discover Financial Services by 5.8% during the second quarter. Stifel Financial Corp now owns 1,250,428 shares of the financial services provider’s stock worth $77,758,000 after buying an additional 68,942 shares during the last quarter. Finally, Sciencast Management LP bought a new stake in shares of Discover Financial Services during the second quarter worth approximately $373,000. 84.77% of the stock is owned by institutional investors.

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Discover Financial Services Company Profile

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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