Zacks Investment Research lowered shares of Discover Financial Services (NYSE:DFS) from a hold rating to a sell rating in a research note released on Tuesday, October 17th.
According to Zacks, “Discover Financial’s shares have underperformed the industry year to date. Its weak Payment Service segment continues to hurt profitability. It has also been incurring expenses in order to compete with other credit card issuers, attract and retain customers, and increase card usage from past many quarters. The company has seen the Zacks Consensus Estimate for 2017 and 2018 earnings being revised downward over the last 90 days. The company will release its third quarter results on Oct 24, 2017 after the market closes.”
A number of other equities analysts also recently weighed in on the stock. Morgan Stanley lowered their target price on shares of Discover Financial Services from $71.00 to $70.00 and set an overweight rating for the company in a research note on Friday, September 8th. William Blair reissued an outperform rating on shares of Discover Financial Services in a research note on Tuesday, July 18th. Wells Fargo & Company started coverage on shares of Discover Financial Services in a research note on Tuesday, October 10th. They issued a market perform rating and a $69.00 price target for the company. BidaskClub downgraded shares of Discover Financial Services from a hold rating to a sell rating in a research note on Monday, June 26th. Finally, ValuEngine downgraded shares of Discover Financial Services from a buy rating to a hold rating in a research report on Monday, September 11th. Three equities research analysts have rated the stock with a sell rating, nine have assigned a hold rating and sixteen have assigned a buy rating to the company. The company has an average rating of Hold and a consensus price target of $74.45.
Shares of Discover Financial Services (DFS) traded down $0.30 during trading on Tuesday, reaching $67.14. 735,320 shares of the company’s stock were exchanged, compared to its average volume of 2,538,716. The firm has a market capitalization of $24,506.39, a price-to-earnings ratio of 11.59, a P/E/G ratio of 1.78 and a beta of 1.52. The company has a debt-to-equity ratio of 2.52, a current ratio of 1.55 and a quick ratio of 1.55. Discover Financial Services has a 1 year low of $55.71 and a 1 year high of $74.33.
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The business also recently disclosed a quarterly dividend, which will be paid on Thursday, December 7th. Stockholders of record on Wednesday, November 22nd will be given a dividend of $0.35 per share. This represents a $1.40 annualized dividend and a dividend yield of 2.09%. The ex-dividend date of this dividend is Tuesday, November 21st. Discover Financial Services’s payout ratio is currently 24.05%.
Discover Financial Services announced that its board has initiated a stock repurchase plan on Tuesday, July 25th that authorizes the company to buyback $2.75 billion in outstanding shares. This buyback authorization authorizes the financial services provider to buy up to 11.3% of its stock through open market purchases. Stock buyback plans are usually an indication that the company’s board of directors believes its stock is undervalued.
In other news, CEO David W. Nelms sold 30,000 shares of the business’s stock in a transaction on Friday, September 1st. The shares were sold at an average price of $59.10, for a total transaction of $1,773,000.00. Following the completion of the sale, the chief executive officer now directly owns 1,529,912 shares of the company’s stock, valued at $90,417,799.20. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, EVP Carlos Minetti sold 8,000 shares of the business’s stock in a transaction on Monday, October 2nd. The shares were sold at an average price of $64.51, for a total transaction of $516,080.00. The disclosure for this sale can be found here. In the last quarter, insiders have sold 172,277 shares of company stock worth $11,020,650. Company insiders own 0.96% of the company’s stock.
Institutional investors have recently made changes to their positions in the business. BlackRock Inc. increased its holdings in shares of Discover Financial Services by 3,280.4% during the first quarter. BlackRock Inc. now owns 30,704,582 shares of the financial services provider’s stock valued at $2,099,886,000 after acquiring an additional 29,796,268 shares in the last quarter. Vanguard Group Inc. increased its holdings in shares of Discover Financial Services by 0.9% during the second quarter. Vanguard Group Inc. now owns 25,748,479 shares of the financial services provider’s stock valued at $1,601,297,000 after acquiring an additional 217,535 shares in the last quarter. Boston Partners increased its holdings in shares of Discover Financial Services by 4.6% during the third quarter. Boston Partners now owns 12,187,219 shares of the financial services provider’s stock valued at $785,833,000 after acquiring an additional 538,244 shares in the last quarter. Capital World Investors increased its holdings in shares of Discover Financial Services by 18.3% during the second quarter. Capital World Investors now owns 10,578,342 shares of the financial services provider’s stock valued at $657,867,000 after acquiring an additional 1,638,334 shares in the last quarter. Finally, FMR LLC increased its holdings in Discover Financial Services by 17.4% in the 2nd quarter. FMR LLC now owns 10,374,397 shares of the financial services provider’s stock worth $645,184,000 after buying an additional 1,534,882 shares during the period. Institutional investors and hedge funds own 87.86% of the company’s stock.
About Discover Financial Services
Discover Financial Services (DFS) is a direct banking and payment services company. The Company is a bank holding company, as well as a financial holding company. The Company operates through two segments: Direct Banking and Payment Services. It provides direct banking products and services, and payment services through its subsidiaries.
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