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Discover Financial Services (DFS), headquartered in Riverwoods, Illinois, provides digital banking products and services, and payment services. Valued at $43.5 billion by market cap, the company offers checking and savings accounts, certificates of deposit, credit card, personal, and home loans through its banking business. The credit services giant is expected to announce its fiscal fourth-quarter earnings for 2024 after the market closes on Wednesday, Jan. 22.
Ahead of the event, analysts expect DFS to report a profit of $2.83 per share on a diluted basis, up 83.8% from $1.54 per share in the year-ago quarter. The company beat the consensus estimates in two of the last four quarters while missing the forecast on two other occasions.
For the full year, analysts expect DFS to report EPS of $13.70, up 21.7% from $11.26 in fiscal 2023. However, its EPS is expected to decline 6.3% year over year to $12.84 in fiscal 2025.
DFS stock has outperformed the S&P 500’s ($SPX) 23.3% gains over the past 52 weeks, with shares up 54.1% during this period. Similarly, it outperformed the Financial Select Sector SPDR Fund’s (XLF) 28.5% gains over the same time frame.
DFS has outperformed due to a favorable interest rate environment and anticipation surrounding an upcoming acquisition. Moreover, modest loan growth and a credit improvement also contributed to their success.
On Oct. 16, DFS reported its Q3 results and its shares closed up by 2% in the following trading session. Its EPS of $3.69 beat Wall Street expectations of $3.28. The company’s revenue was $4.5 billion, surpassing Wall Street forecasts of $4.4 billion.
Analysts’ consensus opinion on DFS stock is moderately bullish, with a “Moderate Buy” rating overall. Out of 14 analysts covering the stock, three advise a “Strong Buy” rating, one suggests a “Moderate Buy,” and 10 give a “Hold.” DFS’ average analyst price target is $174.54, indicating a potential marginal upside from the current levels.
