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Discover Financial Services - Stock Quote DFS

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Morningstar's Discover Financial Services Stock Analysis

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Discover Starts 2022 Strong With Strong Credit Performance and Loan Growth

Michael Miller Equity Analyst

Analyst Note

| Michael Miller |

Narrow-moat Discover reported strong first-quarter earnings as loan growth accelerated and credit losses remain surprisingly low. Including a $139 million unrealized loss on equity investments, revenue increased 4% from last year to $2.94 billion. Earnings per share fell 16% from the prior-year quarter, which benefited from a significant credit loss reserve release, and increased 16% sequentially to $4.22. With the earnings release, Discover announced a new $4.2 billion share repurchase plan and a 20% increase in its annual dividend to $0.60 per share. While this was a strong report, there was nothing to materially change our thinking on the company and we are maintaining our fair value estimate of $138.

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Discover Financial Services's Company Profile

Business Description

Discover Financial Services is a bank operating in two distinct segments: direct banking and payment services. The company issues credit and debit cards and provides other consumer banking products including deposit accounts, students loans, and other personal loans. It also operates the Discover, Pulse, and Diners Club networks. The Discover network is the fourth- largest payment network in the United States as ranked by overall purchase volume, and Pulse is one of the largest ATM networks in the country.

2500 Lake Cook Road
Riverwoods, IL, 60015
T +1 224 405-0900
Sector Financial Services
Industry Credit Services
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 16,700

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