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With a market cap of $33.5 billion, Riverwoods, Illinois-based Discover Financial Services (DFS) is a digital banking and payment services company offering various financial products through its networks. The company is slated to announce its fiscal Q2 earnings report after the market closes on Wednesday, July 17.
Ahead of the event, analysts expect Discover Financial to report a profit of $2.97 per share, down 16.1% from $3.54 per share in the year-ago quarter. The company has consistently missed Wall Street's bottom-line estimates in the last four quarterly reports. Despite reporting better-than-expected revenue, DFS missed the consensus EPS estimate by 63.1% in the most recent quarter due to higher loan loss provisions.
For fiscal 2024, analysts expect DFS to report EPS of $11.47, up 1.9% from $11.26 in fiscal 2023.
Discover Financial has outperformed the broader markets in 2024, with shares up 18.8% on a YTD basis versus the S&P 500 Index's ($SPX) 15.5% gain and the S&P 500 Financials Sector SPDR's (XLF) 10.9% returns over the same period.
On Feb. 20, Discover Financial's stock surged 12.6% due to the announcement of its acquisition by Capital One Financial (COF), which valued the company at $35.3 billion. In addition, despite a significant drop in profit, the stock rose 3.7% following its Q1 earnings result on Apr. 17 because investors were encouraged by the substantial increase in net interest income (NII).
Analysts' consensus view on Discover Financial stock is optimistic, with a "Moderate Buy" rating. Among 19 analysts covering the stock, seven recommend a "Strong Buy," one has a "Moderate Buy" rating, and 11 give a "Hold" rating. This configuration is more bullish than three months ago, with six analysts suggesting a "Strong Buy." DFS is trading slightly below the average analyst price target of $133.88.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
