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Discover Financial Services (DFS) is a direct banking and payment services company based in Riverwoods, Illinois. With a market cap of $34.92 billion, DFS offers a variety of financial products and services, including credit cards, personal loans, student loans, and deposit products. It is also known for its Discover Network, which processes transactions for millions of businesses. The company is set to announce its Q3 earnings after the market closes on Wednesday, Oct. 16.
Ahead of the event, analysts expect DFS to report a profit of $3.40 per share, up 31.3% from $2.59 in the year-ago quarter. In the last four quarters, the company has missed Wall Street’s bottom-line estimates in three and surpassed on another occasion.
Its adjusted earnings of $6.06 per share for the last quarter surpassed the consensus estimate by 98%. Discover Financial Services' earnings beat was driven by solid interest income growth, higher loan volumes, and lower credit loss provisions, partially offset by increased operating expenses.
For fiscal 2024, analysts expect DFS to report EPS of $12.88, up 14.4% from $11.26 in fiscal 2023.
DFS stock is up 24.8% on a YTD basis, outperforming the broader S&P 500 Index's ($SPX) 20.8% gains and the iShares U.S. Financial Services ETF’s (IYG) 18.9% returns over the same time frame.
On Jul. 17, Discover Financial rose over 3% after reporting Q2 results. The company reported revenue of $5.99 billion, which exceeded analysts’ estimates of $4.16 billion.
The consensus opinion on DFS stock is moderately bullish, with an overall “Moderate Buy” rating. Out of 14 analysts covering the stock, three advise a “Strong Buy” rating, one suggests a “Moderate Buy” rating, and 10 suggest a “Hold.”
This configuration is slightly less bullish than three months ago when the stock had four “Strong Buy” ratings. DFS' average analyst price target is $151.25, indicating a potential upside of 7.8% from the current levels.
On the date of publication, Rashmi Kumari 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.
