Discover Financial Analysts Cut Their Forecasts After Q4 Results

Discover Financial Services DFS reported a 62% plunge in its profit for the fourth quarter on Wednesday.

Discover reported quarterly earnings of $1.54 per share which fell below the Street's estimate of $2.52. Revenue clocked in at $4.196 billion, net of interest expense, beating analyst estimates of $4.10 billion, according to data from Benzinga Pro.

Total loans at the end of the period were $128.4 billion, up 15% year-over-year. Fourth-quarter total net charge-off rate came in at 4.11%.

“Discover’s performance in 2023 was driven by strong asset and deposit growth and a resilient net interest margin, while net charge-offs increased but to the low end of our expected range,” said John Owen, interim CEO and president of Discover.

Discover also declared a semi-annual cash dividend on its Series C stock of $2,750 per share, which equals $27.50 per depositary share. The company declared a semi-annual cash dividend of $3,062.50 per share on Series D stock, which equals $30.625 per depositary share.

Discover Financial shares dipped 10.8% to close at $97.00 on Thursday.

These analysts made changes to their price targets on Discover Financial following earnings announcement.

• Barclays cut the price target on Discover Financial from $124 to $112. Barclays analyst Mark Devries maintained an Equal-Weight rating.
• HSBC lowered the price target on Discover Financial from $121 to $107. HSBC analyst Saul Martinez downgraded the stock from Buy to Hold.

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