Discover Financial Services (DFS) Downgraded by Zacks Investment Research

Discover Financial Services (NYSE:DFS) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a report issued 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.”

DFS has been the subject of several other research reports. Deutsche Bank started coverage on Discover Financial Services in a research note on Tuesday. They issued a “buy” rating and a $92.00 target price for the company. ValuEngine lowered Discover Financial Services from a “buy” rating to a “hold” rating in a research note on Monday, September 11th. Morgan Stanley cut their target price on Discover Financial Services from $71.00 to $70.00 and set an “overweight” rating for the company in a research note on Friday, September 8th. Barclays set a $73.00 target price on Discover Financial Services and gave the stock a “hold” rating in a research note on Wednesday, October 25th. Finally, BMO Capital Markets cut their target price on Discover Financial Services from $69.00 to $67.00 and set a “market perform” rating for the company in a research note on Wednesday, October 25th. One equities research analyst has rated the stock with a sell rating, six have assigned a hold rating and eighteen have assigned a buy rating to the company. The company currently has a consensus rating of “Buy” and a consensus target price of $78.50.

Discover Financial Services (NYSE DFS) traded down $0.01 during mid-day trading on Wednesday, hitting $76.91. 3,122,400 shares of the company traded hands, compared to its average volume of 2,301,850. The company has a debt-to-equity ratio of 2.52, a quick ratio of 1.55 and a current ratio of 1.55. The company has a market capitalization of $28,180.00, a PE ratio of 13.24, a price-to-earnings-growth ratio of 1.83 and a beta of 1.52. Discover Financial Services has a one year low of $57.50 and a one year high of $77.79.

In related news, CFO R. Mark Graf sold 16,503 shares of the stock in a transaction on 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 sale, the chief financial officer now directly owns 82,402 shares of the company’s stock, valued at $5,493,741.34. The transaction was disclosed in a legal filing 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 on Friday, December 1st. The shares were sold at an average price of $70.15, for a total value of $2,104,500.00. Following the sale, the chief executive officer now directly owns 1,441,912 shares in the company, valued at $101,150,126.80. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 130,019 shares of company stock valued at $8,892,976. 0.96% of the stock is owned by corporate insiders.

A number of large investors have recently made changes to their positions in the business. Grove Bank & Trust lifted its position in shares of Discover Financial Services by 2,483.3% during the 3rd quarter. Grove Bank & Trust now owns 1,550 shares of the financial services provider’s stock valued at $100,000 after buying an additional 1,490 shares in the last quarter. Rational Advisors LLC purchased a new position in shares of Discover Financial Services during the 3rd quarter valued at about $123,000. Americafirst Capital Management LLC purchased a new position in shares of Discover Financial Services during the 3rd quarter valued at about $140,000. Capstone Investment Advisors Netherlands B.V. purchased a new position in shares of Discover Financial Services during the 2nd quarter valued at about $157,000. Finally, San Francisco Sentry Investment Group CA purchased a new position in shares of Discover Financial Services during the 2nd quarter valued at about $170,000. 84.77% of the stock is currently owned by institutional investors and hedge funds.

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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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