Jefferies analyst John Hecht has maintained their bullish stance on DFS stock, giving a Buy rating today.
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John Hecht has given his Buy rating due to a combination of factors related to Discover Financial Services’ recent financial performance. The company’s January credit results showed some positive trends, with delinquencies (DQs) and net charge-offs (NCOs) aligning with historical seasonal expectations. Specifically, DQs improved on a year-over-year basis, decreasing by 15 basis points, which suggests a positive trend towards reverting to historical levels.
Moreover, the net charge-offs, while slightly higher month-over-month, improved by 25 basis points year-over-year compared to a more significant rise in the previous month. This indicates a stabilization in credit quality, which is a favorable sign for investors. Despite a slowdown in loan growth at the beginning of the year, this was consistent with seasonal patterns, reducing concerns about the company’s ability to manage its credit portfolio effectively.