Published On: Wed, Jun 17th, 2015

Investor Insights on Discover Financial Services (NYSE:DFS)

[Business Wire] Discover Financial Services (NYSE:DFS)(TREND ANALYSIS) announced that it is closing the mortgage origination business it acquired in 2012 to focus on its profitable direct banking products for which the company sees greater opportunities for growth.

“The business is not projected to meet our financial expectations due to ongoing challenges to our home loans operating model, so we made the difficult decision to exit,” said Carlos Minetti, president of consumer banking for Discover.

Discover Home Loans, Inc. will accept applications at its Louisville, Ken., offices through July 31. Business operations will continue there until early August, when Atlanta-based AmeriSave Mortgage Corporation is expected to finish processing the remaining applications. AmeriSave plans to establish an office in Louisville and offer jobs to approximately 125 Discover employees. At Discover’s Irvine, Calif., location, the business will stop accepting applications as of today and will continue processing and funding loans already in process.

Stock Performance: Click here for a free comprehensive Trend Analysis Report

Discover Financial Services (NYSE:DFS) stock is currently trading 13.02% below its 52-week-high, 7.48% above its 52-week-low. The 1-year stock price history is in the range of $54.02 – $66.75. Discover Financial Services (DFS) has a price to earnings ratio of 11.93 versus Financial sector average of 17.86. DFS stock price has underperformed the S&P 500 by 12.3%. The Financial Services company is currently valued at $25.69 billion and its share price closed the last trading session at $58.06. The stock has a 50-day moving average of $58.88 and a 200-day moving average of $59.87.

Discover Financial Services (DFS) current short interest stands at 4.78 million shares. It has increased by 3% from the same period of last month. Around 2% of the company’s shares, which are float, are short sold. With a 10-days average volume of 2.71 million shares, the number of days required to cover the short positions stand at 1.8 days.

The company is expected to announce next quarter earnings on July 28, at consensus estimate of $1.33. Discover Financial Services (DFS) reported last quarter earnings on April 21. The Financial Services company announced earnings per share of $1.28 against a consensus Street estimate of $1.26, beating the average estimate by $0.02. This corresponds to a decrease of $0.05 compared to the same quarter of the previous fiscal year.

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There are currently twenty-nine analysts that cover Discover Financial Services stock. Of those twenty-nine, twenty-two have a Buy rating, seven have a Hold rating. On a consensus basis this yields to an Overweight rating. The consensus target price stands at $70.04.

A recent analyst activity consisted of Bernstein reiterating their Market Perform stance on May 6. Bernstein increased their price target on DFS from $58.61 to $69. This corresponds to a 18.84% upside from the last closing price. On the date of report, the stock closed at $58.35.

Citigroup reiterated their Buy stance on April 22, and decreased their price target from $70 to $68. This corresponds to a 17.12% upside from the last closing price. On the date of report, the stock closed at $57.62.

Another research firm was Nomura who reiterated their Buy stance on April 22. Nomura decreased price target from $68 to $66. This translates to a 13.68% upside from the last closing price. On the date of report, the stock closed at $57.62.

Company profile

Discover Financial Services is a credit card issuer and electronic payment services company. The Company issues credit cards and offers student and personal loans, as well as savings products such as certificates of deposit and money market accounts and operates an automated teller machine (ATM)/debit network, which includes ATMs, as well as POS terminals nationwide.

 

 

[“source – marketswired.com”]