Mon, Oct. 5, 9:27 AM
- After a tough stretch for the stock - down more than 20% YTD - Discover (NYSE:DFS) trades at a relative P/E of 62% vs. the S&P 500, well below the long-term average of 70%, says analyst Kevin St. Pierre, upgrading to Outperform. His $69 price target is 33% above Friday's close.
- St. Pierre figures Discover is sitting on about $5.50 per share of excess capital above the target CET1 ratio of 11%.
- He also takes note of Discover's network - it has the same capacity as that of MasterCard and Visa, but is massively underutilized, says St. Pierre.
- He now has Outperform ratings on all of the card issuers. His favorites over the next 12 months are Capital One (NYSE:COF) and Synchrony Financial (NYSE:SYF), over the next two-three years DIscover, and American Express (NYSE:AXP) over the longer term.
- DFS +1.4% to $52.92 premarket.
Thu, Jan. 22, 9:52 AM
- "Guidance stated the revenue margin will likely be modestly down due to NIM compression, lower protection products revenue, higher rewards rate and lower payments volume," says Credit Suisse, cutting its price target to $71 from $74, and its earnings estimates. "NIM is expected to be down in 2015 due primarily to higher funding costs."
- The team now sees 2015 EPS at $5.40 vs. $5.60 previously, and 2016 at $5.75 from $5.95.
- Nomura maintains its Buy rating, but cuts the price target to $68 from $75, with analyst Bill Carcache believing the company may have kitchen-sinked this quarter by pulling forward much of its 2015 reserve building.
- Buy the dip, says RBC Capital, boosting its price target to $72 and keeping the stock as a Top Pick.
- DFS -7.5%
- Previously: Discover -3.8% as results come up short (Jan. 21)
Oct. 22, 2014, 9:47 AM
- "We are focused on maintaining our strong position in a very competitive rewards environment," said CFO Mark Graf on the earnings call (transcript) last night. Management, he says, is "revisiting" the rewards program with a goal of making redemptions easier and getting rid of forfeiture triggers.
- While not yet finalized, management expects a onetime charge of $185M in Q4 due to the extinguishment of all or part of the current reserve for rewards forfeiture.
- DFS -4.6%
- Previously: Discover Financial Services beats by $0.03, revenue in-line
- Previously: Discover loan growth up 7.4% year-over-year
May 20, 2014, 5:38 PM
Mar. 21, 2014, 9:30 AM
- American Express (AXP), Discover (DFS), and Capital One (COF) all have sizable capital surpluses under the Fed's severely adverse scenario, says Buckingham, and are thus poised for sizable capital returns. All three names are ahead 1-2% in opening trades.
- Last night: Discover unveils proposal for 20% dividend boost and $1.6B in buybacks.
- Stress test results
Mar. 20, 2014, 4:21 PM| Mar. 20, 2014, 4:21 PM | 2 Comments
Jan. 24, 2014, 10:20 AM
Jan. 24, 2014, 7:41 AM
- Total loans grew $3.2B, or 5% from last year to $65.8B. Credit card loans grew $2B, of 4% to $53.1B. Discover card sales volume up 3%.
- Has credit quality gotten as good as it's going to get? The net charge-off rate for credit card loans ticked up 4 bps from last quarter to 2.09% and delinquencies over 30 days gained 5 bps to 1.72%.
- 7M shares repurchased during quarter, reducing float by 1%.
- FBR maintains its Outperform rating and boosts the price target to $65.
- DFS +1.6% premarket
- Press release, Q4 results
Oct. 21, 2013, 5:47 PM
Oct. 21, 2013, 4:23 PM
- Direct banking pretax income of $918M off 6% from a year ago.
- Discover card sales volume of $28B up 3% Y/Y. Credit card loans of $50.4B up 4%. Total loans of $62.7B up 5%, with private student loans of $387M up 5%, personal loans of $830M up 26%.
- Net interest margin of 9.65% gains 26 basis points from a year ago thanks to lower funding costs offsetting lower loan yields. Net interest income of $122M up 9%.
- Delinquency rate for credit cards over 30 days pas due falls 16 bps to 1.67%, but is up 9 bps from Q2. Credit card net charge-offs of 2.05% is off 29 bps from a year ago and from Q2. Student loan charge-offs of 1.33% is up 50 bps from a year ago.
- Loan loss reserve build of $42M due to lower expected recoveries on aged charge-offs and loan growth. Last year's Q3 saw a provision release of $167M.
- Payment services income of $28M Is off $20M from a year ago.
- About 7M shares repurchased during Q for $350M, cutting the float by 1%.
- Conference call at 5 ET.
- Q3 results, press release.
- DFS -4.2% AH.
Apr. 23, 2013, 8:45 AMMore on Discover Financial (DFS) Q1 earnings: Discover card sales volume +4% Y/Y. 30-day delinquency falls to a record low 1.77%, off 33 bps Y/Y. Net interest margin of 9.39%, up 30 bps Y/Y thanks to lower funding costs. Reserve release of $154M vs. $274M a year ago. Expenses of $75M, up 12% Y/Y due to higher compensation costs. Shares +2.3% premarket. (PR) | Apr. 23, 2013, 8:45 AM | 6 Comments
Mar. 14, 2013, 6:35 PMDiscover Financial Services (DFS) declares $0.20/share quarterly dividend, 42.8% increase from prior dividend of $0.14. Forward yield 1.87%. The board approved share repurchase program of $2.4B, replacing the prior $2B plan, under which $600M are pending. Shares +3.2% AH. (PR) | Mar. 14, 2013, 6:35 PM | 1 Comment
Mar. 14, 2013, 5:53 PM
Mar. 6, 2013, 9:31 AMDiscover Financial (DFS +1.4%) is upgraded to Buy by Blair's Robert Napoli, arguing the 9.6 PE on 2015 EPS (2015?) gives little credit to the company's franchise value and "proven" management strength. Napoli says the shares deserve a 13 multiple, giving them 35-40% upside from here. | Mar. 6, 2013, 9:31 AM | Comment!
Dec. 20, 2012, 10:46 AMMore on Discover (DFS -3%) FQ4 earnings: Bulls on the high-flier (+61% YTD) may have a buying opportunity as the earnings miss looks to be the result of an 18% increase in expenses thanks to costs associated with the Tree.com acquisition and new partnerships. Operationally: Total loans +6% Y/Y, net interest margin +34 bps, net charge-offs a historical low of 2.29%, delinquency rate of 1.86% down 53 bps. (PR) | Dec. 20, 2012, 10:46 AM | 3 Comments
Dec. 17, 2012, 6:50 PMFinancials add to the regular session's big gains as Meredeth Whitney gets bullish on the sector, particularly Bank of America, Citigroup, and Discover. The catalyst for the group will be the March release of the Fed's stress tests showing them adequately capitalized, paving the way for more share repurchases and dividend bumps. BAC +2.1%, C +0.5%, DFS +2.3%, XLF +0.4% AH. | Dec. 17, 2012, 6:50 PM | 8 Comments
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