Zacks Investment Research Lowers Discover Financial Services (DFS) to Hold
Zacks Investment Research cut shares of Discover Financial Services (NYSE:DFS) from a buy rating to a hold rating in a research note issued to investors on Monday morning.
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.”
Several other analysts have also recently issued reports on DFS. Citigroup dropped their target price on Discover Financial Services from $78.00 to $75.00 and set a neutral rating for the company in a report on Thursday, November 1st. JPMorgan Chase & Co. upgraded Discover Financial Services from a neutral rating to an overweight rating in a report on Tuesday, October 2nd. ValuEngine cut Discover Financial Services from a hold rating to a sell rating in a report on Thursday, November 1st. Bank of America upped their price target on Discover Financial Services from $86.00 to $92.00 and gave the company a buy rating in a research note on Friday, September 21st. Finally, Wells Fargo & Co upped their price target on Discover Financial Services from $76.00 to $82.00 and gave the company a market perform rating in a research note on Monday, October 1st. Eight analysts have rated the stock with a hold rating, thirteen have issued a buy rating and one has assigned a strong buy rating to the stock. Discover Financial Services presently has a consensus rating of Buy and a consensus price target of $86.40.
Discover Financial Services (NYSE:DFS) last issued its quarterly earnings results on Thursday, October 25th. The financial services provider reported $2.05 EPS for the quarter, hitting the Thomson Reuters’ consensus estimate of $2.05. Discover Financial Services had a return on equity of 25.49% and a net margin of 19.51%. The firm had revenue of $2.72 billion during the quarter, compared to analysts’ expectations of $2.69 billion. As a group, equities analysts predict that Discover Financial Services will post 7.83 EPS for the current year.
The firm also recently declared a quarterly dividend, which will be paid on Thursday, December 6th. Stockholders of record on Wednesday, November 21st will be paid a $0.40 dividend. This represents a $1.60 annualized dividend and a dividend yield of 2.41%. The ex-dividend date is Tuesday, November 20th. Discover Financial Services’s dividend payout ratio (DPR) is presently 26.76%.
In related news, EVP Carlos Minetti sold 3,750 shares of the stock in a transaction dated Monday, October 1st. The stock was sold at an average price of $77.26, for a total transaction of $289,725.00. Following the transaction, the executive vice president now owns 130,102 shares of the company’s stock, valued at approximately $10,051,680.52. The transaction was disclosed in a filing with the SEC, which is available through this hyperlink. Also, Chairman David W. Nelms sold 30,000 shares of the stock in a transaction dated Monday, October 1st. The stock was sold at an average price of $77.16, for a total value of $2,314,800.00. Following the transaction, the chairman now directly owns 1,180,798 shares in the company, valued at approximately $91,110,373.68. The disclosure for this sale can be found here. In the last ninety days, insiders sold 104,100 shares of company stock worth $7,590,463. Corporate insiders own 0.81% of the company’s stock.
Institutional investors and hedge funds have recently bought and sold shares of the stock. Adirondack Trust Co. lifted its stake in Discover Financial Services by 204.5% during the 3rd quarter. Adirondack Trust Co. now owns 1,340 shares of the financial services provider’s stock worth $102,000 after acquiring an additional 900 shares in the last quarter. Sandy Spring Bank raised its position in Discover Financial Services by 181.5% in the 2nd quarter. Sandy Spring Bank now owns 1,689 shares of the financial services provider’s stock valued at $119,000 after purchasing an additional 1,089 shares in the last quarter. Migdal Insurance & Financial Holdings Ltd. raised its position in Discover Financial Services by 8,341.7% in the 2nd quarter. Migdal Insurance & Financial Holdings Ltd. now owns 2,026 shares of the financial services provider’s stock valued at $143,000 after purchasing an additional 2,002 shares in the last quarter. Honkamp Krueger Financial Services Inc. acquired a new stake in Discover Financial Services in the 3rd quarter valued at about $155,000. Finally, Moneta Group Investment Advisors LLC raised its position in Discover Financial Services by 440.1% in the 2nd quarter. Moneta Group Investment Advisors LLC now owns 6,670 shares of the financial services provider’s stock valued at $157,000 after purchasing an additional 5,435 shares in the last quarter. 86.26% of the stock is currently owned by hedge funds and other institutional investors.
Discover Financial Services Company Profile
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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