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Tuesday, December 1, 2020

Is Now the Time to Invest in Discover Financial Services (NYSE:DFS)?

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Discover Financial Services (DFS) shares are trading at higher $54.30 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $61.15.

To add more color to this target, the company’s high over the last year is $87.43 and the low is $23.25. Over the last 52 weeks, DFS is down -37.89% while the S&P 500 is down 0.00%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, DFS reported a profit of $2.19 billion. Discover Financial Services also saw revenues increase to $2.67 billion. In addition, DFS has free cash flow of $3.11 billion as of 06-2020.

DFS booked profit margins of 8.60%, its Return on Equity (ROE) is 10.00%, and its Return on Assets is 0.90%. All told, it is clear that, DFS needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. DFS has a short ratio of 1.92 and outstanding shares of 306.00M.

Company Outlook

DFS has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 2.83 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 3.17. Investors should also keep an eye on sector updates as DFS has historically followed its peers on positive news.

All told, Discover Financial Services DFS has strung together solid data and demonstrated underlying fundamentals. At its current valuation, DFS represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Discover Financial Services DFS is now commanding a market cap of 16.37B and a float of 304.79M. DFS is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of DFS stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in DFS, either long or short, and we have not been compensated for this article.

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