Oppenheimer Keeps Their Buy Rating on Discover Financial Services (DFS)

In a report released today, Dominick Gabriele from Oppenheimer maintained a Buy rating on Discover Financial Services (DFS), with a price target of $81. The company’s shares closed yesterday at $77.53, close to its 52-week high of $80.36.

Gabriele observed:

“DFS reported 1Q19 EPS of $2.15 vs. our/consensus’ $2.01/$2.02. It was a clean beat with revenue in line but better efficiency and provision expense. DFS continues to provide high capital return to shareholders and improving ROE. There was some pressure on card YoY loan growth yet better than our expectations. Commentary was given on this being a point in the cycle where prudent lenders would likely tighten credit and likely not extend lines when acquiring new customers and we take read throughs to COF. CECL is coming and there is some worry that cards could be the most affected loan product in building reserves. CFO Mark Graf stated that if adopted today in 1Q19, DFS’ total company reserves would be 55-65% higher.”

According to TipRanks.com, Gabriele is a 3-star analyst with an average return of 2.4% and a 68.8% success rate. Gabriele covers the Financial sector, focusing on stocks such as Credit Acceptance Corp, Santander Consumer USA, and Capital One Financial.

Discover Financial Services has an analyst consensus of Strong Buy, with a price target consensus of $80.67.

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The company has a one-year high of $80.36 and a one-year low of $54.36. Currently, Discover Financial Services has an average volume of 1.87M.

Based on the recent corporate insider activity of 77 insiders, corporate insider sentiment is negative on the stock.

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Discover Financial Services is a holding company, which engages in the provision of direct banking and payment services. It operates through the Direct Banking and Payment Services segments.

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