Credit card and digital banking specialist Discover Financial Services (DFS) posted its Q3 results after market close on October 16. The company’s results beat both top-line and bottom-line analyst expectations, although DFS stock traded slightly lower after the release.
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For the quarter, Discover delivered revenue, net of interest expense, of $4.45 billion for the quarter. That number represents a 10% increase over Q3 of 2023 and comes in $100 million higher than what analysts were forecasting. Meanwhile, GAAP EPS for Q3 was $3.69/share, which beat street estimates of $3.48/share. That result represents a 42% increase from the same period last year.
In commenting on the results, Discover Financial Services’ interim CEO Michael Shepherd cited increased net interest margin along with some credit improvement amid modest loan growth.
Current Full-Year Earnings Estimates
For the full year ending December 2024, analysts are expecting DFS to report $13.19 of earnings per share. That translates to a P/E ratio of ~11.2x based on the October 16 closing market price of $147.53. Shares of DFS, however, were trading about 1% lower after the results came in.
Does Wall Street Recommend DFS Stock?
Based on Wall Street ratings from 12 analysts, TipRanks classifies Discover Financial Services stock as a Hold. There have been three Buy ratings and nine Hold ratings on DFS stock over the past 3 months. The average DFS stock price target is $151.33, which is a few percentage points higher than the recent market price. It is worth noting that some analyst estimates are likely to change following today’s earnings report.
Shares of DFS have rallied more than 30% so far in 2024. It will be interesting to see if the stock can continue its price momentum following the Q3 results.
