Zacks Investment Research downgraded shares of Discover Financial Services (NYSE:DFS) from a buy rating to a hold rating in a research note released on Tuesday.

According to Zacks, “Discover Financial’s shares have gained against its industry’s decline in a year’s time. Moreover, it has witnessed its 2018 and 2019 earnings estimates move upward over the past 30 days. 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 also look promising. Card sales have been soaring over the past many years. Its efficient capital management is also impressive. However, the company has been incurring considerable expenses in order to compete with other credit card issuers, attract and retain customers as well as increase the card usage from the past quarters. Rising expenses and increase in debt level have been weighing on the company’s margins.”

Several other brokerages have also issued reports on DFS. Bank of America lifted their target price on shares of Discover Financial Services from $86.00 to $92.00 and gave the company a buy rating in a research report on Friday, September 21st. JPMorgan Chase & Co. upgraded shares of Discover Financial Services from a neutral rating to an overweight rating in a research report on Tuesday, October 2nd. Wells Fargo & Co lifted their target price on shares of Discover Financial Services from $76.00 to $82.00 and gave the company a market perform rating in a research report on Monday, October 1st. Finally, Sandler O’Neill reiterated a buy rating and issued a $87.00 target price on shares of Discover Financial Services in a research report on Friday, July 27th. Nine analysts have rated the stock with a hold rating, fourteen have assigned a buy rating and one has given a strong buy rating to the company’s stock. The stock presently has a consensus rating of Buy and a consensus price target of $86.76.

Shares of NYSE DFS opened at $76.03 on Tuesday. Discover Financial Services has a 52-week low of $63.31 and a 52-week high of $81.93. The stock has a market capitalization of $25.68 billion, a PE ratio of 12.71, a P/E/G ratio of 0.77 and a beta of 1.51. The company has a current ratio of 1.49, a quick ratio of 1.49 and a debt-to-equity ratio of 2.54.

Discover Financial Services (NYSE:DFS) last announced its earnings results on Thursday, July 26th. The financial services provider reported $1.91 earnings per share (EPS) for the quarter, beating the Thomson Reuters’ consensus estimate of $1.88 by $0.03. Discover Financial Services had a net margin of 19.07% and a return on equity of 24.25%. The business had revenue of $2.60 billion for the quarter, compared to analyst estimates of $2.63 billion. During the same quarter last year, the business earned $1.40 earnings per share. The company’s revenue for the quarter was up 7.6% compared to the same quarter last year. Research analysts predict that Discover Financial Services will post 7.83 earnings per share for the current fiscal 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 2.10%. Discover Financial Services’s dividend payout ratio is currently 26.76%.

Discover Financial Services declared that its board has authorized a stock buyback program on Thursday, July 19th that allows the company to repurchase $3.00 billion in outstanding shares. This repurchase authorization allows the financial services provider to repurchase up to 11.9% of its shares through open market purchases. Shares repurchase programs are usually an indication that the company’s management believes its stock is undervalued.

In other Discover Financial Services news, EVP Carlos Minetti sold 3,750 shares of Discover Financial Services stock in a transaction dated Tuesday, September 4th. The shares were sold at an average price of $78.21, for a total transaction of $293,287.50. Following the transaction, the executive vice president now directly owns 133,852 shares of the company’s stock, valued at $10,468,564.92. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, Chairman David W. Nelms sold 30,000 shares of Discover Financial Services stock in a transaction dated Monday, October 1st. The stock was sold at an average price of $77.16, for a total transaction of $2,314,800.00. Following the transaction, the chairman now directly owns 1,180,798 shares in the company, valued at $91,110,373.68. The disclosure for this sale can be found here. Over the last three months, insiders sold 101,250 shares of company stock worth $7,663,313. Insiders own 0.81% of the company’s stock.

A number of hedge funds have recently modified their holdings of the business. Bowling Portfolio Management LLC raised its stake in shares of Discover Financial Services by 1.7% in the 3rd quarter. Bowling Portfolio Management LLC now owns 38,708 shares of the financial services provider’s stock valued at $2,959,000 after acquiring an additional 664 shares during the period. Janney Montgomery Scott LLC raised its stake in shares of Discover Financial Services by 0.9% in the 2nd quarter. Janney Montgomery Scott LLC now owns 83,464 shares of the financial services provider’s stock valued at $5,877,000 after acquiring an additional 708 shares during the period. Azimuth Capital Management LLC raised its stake in shares of Discover Financial Services by 0.5% in the 2nd quarter. Azimuth Capital Management LLC now owns 154,100 shares of the financial services provider’s stock valued at $10,850,000 after acquiring an additional 750 shares during the period. Atlantic Trust Group LLC raised its stake in shares of Discover Financial Services by 2.9% in the 1st quarter. Atlantic Trust Group LLC now owns 28,617 shares of the financial services provider’s stock valued at $2,059,000 after acquiring an additional 809 shares during the period. Finally, Wesbanco Bank Inc. raised its stake in shares of Discover Financial Services by 1.5% in the 2nd quarter. Wesbanco Bank Inc. now owns 54,386 shares of the financial services provider’s stock valued at $3,830,000 after acquiring an additional 830 shares during the period. 85.76% of the stock is currently owned by institutional investors.

About Discover Financial Services

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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