Traders Sell Discover Financial Services (DFS) on Strength Following Weak Earnings

Investors sold shares of Discover Financial Services (NYSE:DFS) on strength during trading on Friday after the company announced weaker than expected quarterly earnings. $70.28 million flowed into the stock on the tick-up and $118.10 million flowed out of the stock on the tick-down, for a money net flow of $47.82 million out of the stock. Of all equities tracked, Discover Financial Services had the 24th highest net out-flow for the day. Discover Financial Services traded up $0.55 for the day and closed at $66.73The financial services provider reported $2.03 EPS for the quarter, missing analysts’ consensus estimates of $2.09 by ($0.06). The company had revenue of $2.81 billion during the quarter, compared to the consensus estimate of $2.81 billion. Discover Financial Services had a net margin of 19.51% and a return on equity of 25.49%. The business’s revenue was up 7.4% compared to the same quarter last year. During the same period last year, the company earned $1.51 earnings per share.

The firm also recently announced a quarterly dividend, which will be paid on Thursday, March 7th. Investors of record on Thursday, February 21st will be paid a dividend of $0.40 per share. The ex-dividend date of this dividend is Wednesday, February 20th. This represents a $1.60 dividend on an annualized basis and a yield of 2.40%. Discover Financial Services’s payout ratio is 26.76%.

A number of research firms recently issued reports on DFS. Zacks Investment Research raised Discover Financial Services from a “hold” rating to a “buy” rating and set a $79.00 target price for the company in a research note on Tuesday, November 27th. Barclays set a $85.00 target price on Discover Financial Services and gave the stock a “buy” rating in a research note on Friday, December 14th. JPMorgan Chase & Co. raised Discover Financial Services from a “neutral” rating to an “overweight” rating in a research note on Tuesday, October 2nd. Wells Fargo & Co lowered their target price on Discover Financial Services from $82.00 to $78.00 and set a “market perform” rating for the company in a research note on Friday, October 26th. Finally, Citigroup lowered their target price on Discover Financial Services from $78.00 to $75.00 and set a “neutral” rating for the company in a research note on Thursday, November 1st. One investment analyst has rated the stock with a sell rating, seven have issued a hold rating, ten have assigned a buy rating and one has given a strong buy rating to the stock. The company currently has a consensus rating of “Buy” and a consensus target price of $85.82.

In other Discover Financial Services news, SVP Edward W. Mcgrogan sold 850 shares of the company’s stock in a transaction that occurred on Thursday, November 1st. The stock was sold at an average price of $70.00, for a total transaction of $59,500.00. Following the completion of the transaction, the senior vice president now owns 12,075 shares of the company’s stock, valued at approximately $845,250. The transaction was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, EVP Carlos Minetti sold 3,750 shares of the company’s stock in a transaction that occurred on Monday, December 3rd. The stock was sold at an average price of $71.98, for a total value of $269,925.00. Following the transaction, the executive vice president now directly owns 122,602 shares of the company’s stock, valued at approximately $8,824,891.96. The disclosure for this sale can be found here. In the last ninety days, insiders have sold 70,350 shares of company stock valued at $4,985,938. Insiders own 0.81% of the company’s stock.

Large investors have recently added to or reduced their stakes in the business. Cerebellum GP LLC acquired a new position in Discover Financial Services during the 4th quarter worth approximately $30,000. Adirondack Trust Co. boosted its position in Discover Financial Services by 204.5% during the 3rd quarter. Adirondack Trust Co. now owns 1,340 shares of the financial services provider’s stock worth $102,000 after acquiring an additional 900 shares during the last quarter. Legacy Financial Advisors Inc. boosted its position in Discover Financial Services by 113.3% during the 4th quarter. Legacy Financial Advisors Inc. now owns 1,431 shares of the financial services provider’s stock worth $84,000 after acquiring an additional 760 shares during the last quarter. Honkamp Krueger Financial Services Inc. acquired a new position in Discover Financial Services during the 3rd quarter worth approximately $155,000. Finally, Truvestments Capital LLC acquired a new position in Discover Financial Services during the 3rd quarter worth approximately $163,000. 85.92% of the stock is owned by hedge funds and other institutional investors.

The company has a debt-to-equity ratio of 2.58, a current ratio of 1.48 and a quick ratio of 1.48. The stock has a market capitalization of $22.21 billion, a price-to-earnings ratio of 11.16, a P/E/G ratio of 0.61 and a beta of 1.56.

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Discover Financial Services Company Profile (NYSE:DFS)

Discover Financial Services, through its subsidiaries, operates as a direct banking and payment services company in the United States. The Direct Banking segment offers Discover-branded credit cards to individuals; and other consumer products and services, including private student loans, personal loans, home equity loans, and other consumer lending, as well as deposit products, such as certificates of deposit, money market accounts, savings accounts, checking accounts, and individual retirement arrangement certificates of deposit.

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