Discover Financial Services (NYSE:DFS) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research report issued to clients and 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.”
Other equities analysts have also issued reports about the company. Bank of America increased their price objective on Discover Financial Services from $86.00 to $92.00 and gave the company a “buy” rating in a report on Friday, September 21st. ValuEngine raised Discover Financial Services from a “sell” rating to a “hold” rating in a report on Tuesday, November 27th. Wells Fargo & Co increased their target price on Discover Financial Services from $76.00 to $82.00 and gave the stock a “market perform” rating in a research report on Monday, October 1st. Citigroup dropped their target price on Discover Financial Services from $78.00 to $75.00 and set a “neutral” rating on the stock in a research report on Thursday, November 1st. Finally, JPMorgan Chase & Co. upgraded Discover Financial Services from a “neutral” rating to an “overweight” rating in a research report on Tuesday, October 2nd. Eight analysts have rated the stock with a hold rating, thirteen have assigned a buy rating and one has issued a strong buy rating to the company. Discover Financial Services currently has a consensus rating of “Buy” and a consensus price target of $86.40.
Discover Financial Services (NYSE:DFS) last announced its quarterly earnings data on Thursday, October 25th. The financial services provider reported $2.05 earnings per share for the quarter, meeting the consensus estimate of $2.05. Discover Financial Services had a return on equity of 25.49% and a net margin of 19.51%. The business had revenue of $2.72 billion during the quarter, compared to analyst estimates of $2.69 billion. Analysts forecast that Discover Financial Services will post 7.83 EPS for the current year.
In related news, EVP Carlos Minetti sold 3,750 shares of the stock in a transaction on Tuesday, September 4th. The stock was sold at an average price of $78.21, for a total value of $293,287.50. Following the sale, the executive vice president now owns 133,852 shares in the company, valued at $10,468,564.92. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, Director Cynthia A. Glassman sold 2,000 shares of the stock in a transaction on Tuesday, November 6th. The stock was sold at an average price of $69.50, for a total value of $139,000.00. Following the completion of the sale, the director now owns 54,032 shares in the company, valued at approximately $3,755,224. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 104,100 shares of company stock worth $7,795,625. Company insiders own 0.81% of the company’s stock.
Several hedge funds have recently modified their holdings of DFS. American Century Companies Inc. raised its position in shares of Discover Financial Services by 474.9% in the second quarter. American Century Companies Inc. now owns 1,183,341 shares of the financial services provider’s stock worth $83,319,000 after buying an additional 977,501 shares in the last quarter. Millennium Management LLC increased its stake in Discover Financial Services by 87.1% in the second quarter. Millennium Management LLC now owns 1,263,969 shares of the financial services provider’s stock valued at $88,996,000 after acquiring an additional 588,371 shares during the last quarter. Morgan Stanley increased its stake in Discover Financial Services by 11.0% in the second quarter. Morgan Stanley now owns 4,863,732 shares of the financial services provider’s stock valued at $342,452,000 after acquiring an additional 482,980 shares during the last quarter. Man Group plc increased its stake in Discover Financial Services by 95.8% in the third quarter. Man Group plc now owns 953,485 shares of the financial services provider’s stock valued at $72,894,000 after acquiring an additional 466,429 shares during the last quarter. Finally, Capital World Investors increased its stake in Discover Financial Services by 2.8% in the third quarter. Capital World Investors now owns 14,395,380 shares of the financial services provider’s stock valued at $1,100,527,000 after acquiring an additional 393,987 shares during the last quarter. Institutional investors own 86.26% of the company’s stock.
About Discover Financial Services
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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