Discover Financial Services (DFS) Downgraded by Zacks Investment Research
Discover Financial Services (NYSE:DFS) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research report issued to clients and investors on Tuesday.
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.”
DFS has been the topic of several other research reports. BidaskClub upgraded Discover Financial Services from a “sell” rating to a “hold” rating in a research note on Tuesday, June 20th. Morgan Stanley restated an “overweight” rating and issued a $75.00 price objective (down previously from $81.00) on shares of Discover Financial Services in a research note on Thursday, July 6th. Instinet restated a “buy” rating and issued a $81.00 price objective (down previously from $86.00) on shares of Discover Financial Services in a research note on Wednesday, July 12th. Barclays PLC restated an “equal weight” rating and issued a $70.00 price objective (down previously from $79.00) on shares of Discover Financial Services in a research note on Thursday, July 13th. Finally, William Blair restated an “outperform” rating on shares of Discover Financial Services in a research note on Tuesday, July 18th. Three analysts have rated the stock with a sell rating, eight have issued a hold rating and sixteen have issued a buy rating to the company’s stock. The company has an average rating of “Hold” and an average target price of $73.58.
Shares of Discover Financial Services (NYSE:DFS) traded down 1.15% on Tuesday, hitting $64.60. The company had a trading volume of 1,124,633 shares. The firm has a market capitalization of $24.05 billion, a P/E ratio of 11.15 and a beta of 1.47. Discover Financial Services has a 12-month low of $54.45 and a 12-month high of $74.33. The firm has a 50 day moving average of $61.57 and a 200-day moving average of $61.67.
Discover Financial Services (NYSE:DFS) last released its earnings results on Wednesday, July 26th. The financial services provider reported $1.40 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.45 by ($0.05). Discover Financial Services had a return on equity of 19.94% and a net margin of 22.57%. The company had revenue of $2.42 billion for the quarter, compared to the consensus estimate of $2.40 billion. During the same quarter in the previous year, the company posted $1.47 EPS. The business’s revenue was up 9.2% on a year-over-year basis. On average, equities analysts predict that Discover Financial Services will post $5.92 EPS for the current year.
Discover Financial Services announced that its Board of Directors has initiated a share buyback program on Wednesday, June 28th that authorizes the company to buyback $2.23 billion in outstanding shares. This buyback authorization authorizes the financial services provider to reacquire up to 9.5% of its shares through open market purchases. Shares buyback programs are usually a sign that the company’s board of directors believes its stock is undervalued.
In related news, EVP Carlos Minetti sold 8,000 shares of the stock in a transaction that occurred on Tuesday, August 1st. The stock was sold at an average price of $61.29, for a total transaction of $490,320.00. Following the sale, the executive vice president now owns 197,149 shares of the company’s stock, valued at $12,083,262.21. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CEO David W. Nelms sold 30,000 shares of the stock in a transaction that occurred on Monday, October 2nd. The stock was sold at an average price of $64.55, for a total value of $1,936,500.00. The disclosure for this sale can be found here. Insiders have sold 157,002 shares of company stock worth $9,694,424 in the last three months. 0.96% of the stock is currently owned by company insiders.
Large investors have recently modified their holdings of the stock. V Wealth Management LLC acquired a new stake in Discover Financial Services during the second quarter worth approximately $101,000. FNY Managed Accounts LLC acquired a new stake in Discover Financial Services during the first quarter worth approximately $124,000. Orrstown Financial Services Inc. grew its position in Discover Financial Services by 16.7% during the second quarter. Orrstown Financial Services Inc. now owns 2,002 shares of the financial services provider’s stock worth $125,000 after buying an additional 286 shares in the last quarter. Perigon Wealth Management LLC grew its position in Discover Financial Services by 2.3% during the first quarter. Perigon Wealth Management LLC now owns 2,146 shares of the financial services provider’s stock worth $147,000 after buying an additional 48 shares in the last quarter. Finally, Capstone Investment Advisors Netherlands B.V. acquired a new stake in Discover Financial Services during the second quarter worth approximately $157,000. 85.45% of the stock is currently 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.
For more information about research offerings from Zacks Investment Research, visit Zacks.com
Receive News & Ratings for Discover Financial Services Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Discover Financial Services and related companies with MarketBeat.com's FREE daily email newsletter.