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Discover Financial Services DFS Stock Quote

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Morningstar‘s Stock Analysis DFS

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Low Credit Costs and the Return of Loan Growth Set the Stage for a Strong 2022 for Discover

Michael Miller Equity Analyst

Business Strategy and Outlook

| Michael Miller |

After more than two years of little to no receivable growth and credit losses well below normal levels, we are seeing signs of normalization as consumers are once again borrowing on their cards. We anticipate credit costs will be higher in 2022 but given how low the firm's delinquency rates are we do not expect a full return to normal credit costs until 2023. We do not expect this to put any pressure on the bank's balance sheet as Discover is in a strong financial position. Additionally, Discover's net interest income will benefit from a larger credit card receivable base as growth has returned, with the bank ending July 2022 with $81 billion in credit card loans, 16.7% higher than a year ago.

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Key Statistics DFS

Company Profile DFS

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.

Contact
2500 Lake Cook Road
Riverwoods, IL, 60015
T +1 224 405-0900
Industry Credit Services
Most Recent Earnings Jun 30, 2022
Fiscal Year End Dec 31, 2020
Employees 16,700

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