Research Recommendations For Discover Financial Services (DFS): Here is What You Should Know

Discover Financial Services (NYSE:DFS) saw an upside of 1.33% to close Tuesday at $127.39 after adding $1.67 on the day. The 5-day average trading volume is 1,171,920 shares of the company’s common stock. It has gained $130.59 in the past week. An average of 1,526,100 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 1,444,662.

DFS’s 1-month performance is 3.94% or $6.90 on its low of $117.46 reached on 09/20/21. The company’s shares have touched a 52-week low of $60.42 and high of $135.69, with the stock’s rally to the 52-week high happening on 08/13/21. YTD, DFS has achieved 40.72% or $36.86. However, the current price is down -6.12%% from the 52-week high price.

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Insider Transactions

On Aug 04, 70 days have gone by since the last insider trading activity for Discover Financial Services (DFS). Kolsky Shifra (SVP, Controller and CAO) most recently sold 800 shares at $127.11 per share on Aug 04. This transaction cost the insider $101,687. EVP, Chief Legal Officer & GC, Walcott Wanjiku Juanita, sold 15,000 shares at a price of $127.00 on Aug 04. Then, on Jul 28, Director BUSH MARY K sold 3,824 shares at a price of $123.21 per share. This transaction amounted to $471,155.

Valuation Metrics

The company’s PE ratio for the last five years has touched a high of 28.49 and a low of 2.781. DFS stock has a beta of 1.81. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 3.54 while the price-to-book (PB) in the most recent quarter is 3.20, with the price to cash flow ratio at 7.22.

Discover Financial Services pays an annual dividend of $2.00 per share. Its dividend yield is 1.57% and the payout ratio is 11.30%. DFS’s most recent quarterly dividend payment was made on Sep. 2, when it paid $0.50 a share compared with prior rate of $0.44, up 12.0% from last year’s. The company has boosted its dividend for the last 1 consecutive years with the latest dividend increase of $0.06 reported on Wednesday July 21 2021. Measured over the last 3 years, the Dividend has been growing by 35.38% yearly.

It is projected that Discover Financial Services’s next ex-dividend date will be on 22-Nov. DFS is expected to distribute $0.50 as its next dividend.

As well, the company’s long term debt to equity for the quarter ending June 29 was 1.17, while the total debt to equity was 1.60 while for the period ending June 29; Discover Financial Services’s operating margin was 89.00%. The firm’s gross profit as reported stood at $9.23 billion against revenue of $11.1 billion.

Earnings Surprise

For the quarterly period ending June 29 this year, Net income and sales went down compared to those figures reported in the previous quarter. Analysts expected DFS to announce $3.99 per share in earnings in its latest quarter, but it posted $5.55, representing a 39.10% surprise. DFS stock balance sheet for the quarter ending June 29 shows that, with total debt at $19.35 billion. Shareholders hold equity totaling $299.47 million

Technical Picture

Let’s look briefly at Discover Financial Services (DFS) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 12 October was 52.93% to suggest the stock is trending Neutral, with historical volatility in this time period at 30.40%.

The stock’s 5-day moving average is $127.05, reflecting a -0.07% or -$0.09 change from its current price. DFS is currently trading +5.86% above its 20-day SMA, +11.33% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by +2.83% and +44.29% respectively.

Stochastic %K and %D was 48.49% and 55.75% and the average true range (ATR) pointed at 3.79. The RSI (14) points at 52.28%, while the 14-day stochastic is at 48.33% with the period’s ATR at 3.74. The stock’s 9-day MACD Oscillator is pointing at 0.63 and -0.29 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Discover Financial Services (NYSE: DFS), Seaport Global Securities launched coverage with a Neutral rating. Analysts offering their rating for DFS stock have a consensus rating for the stock as Overweight. Currently, 0 brokerage advisors rate DFS as a “sell,”, while 10 advise that investors “Hold.” 1 analysts have rated the stock as underweight. 0 rates the stock as overweight while 13 have offered a “buy” rating.

What is DFS’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $117.00 and a high of $160.00, with their median price target at $141.00. Looking at these predictions, the average price target given by analysts is for Discover Financial Services (DFS) stock is $139.67.


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