Top investors say Discover Financial Services (DFS) ticks everything they need

Discover Financial Services (NYSE: DFS) stock jumped 0.46% on Thursday to $99.88 against a previous-day closing price of $99.42. With 1.71 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.12 million shares. During the session, the Credit Services company that operates in wider Financial sector, reached to the highest price of $100.39 whereas the lowest price it dropped to was $99.06. The 52-week range on DFS shows that it touched its highest point at $119.91 and its lowest point at $87.64 during that stretch. It currently has a 1-year price target of $116.44. With its current market cap of 25.33 billion, DFS has annualized dividend of $2.80 while the current yield stands at 2.80%. Beta for the stock currently stands at 1.43.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of DFS was down-trending over the past week, with a drop of -0.73%, but this was down by -1.28% over a month. Three-month performance dropped to -11.00% while six-month performance fell -7.70%. The stock lost -4.35% in the past year, while it has gained 2.10% so far this year. A look at the trailing 12-month EPS for DFS yields 14.81 with Next year EPS estimates of 14.02. For the next quarter, that number is 3.64. This implies an EPS growth rate of -13.20% for this year and 5.66% for next year.

Float and Shares Shorts:

At present, 262.00 million DFS shares are outstanding with a float of 252.07 million shares on hand for trading. On May 14, 2023, short shares totaled 4.91 million, which was 1.93% higher than short shares on Apr 13, 2023. In addition to DIS as the firm’s Walt Disney Company (The), DKS serves as its Dick’s Sporting Goods Inc.

Institutional Ownership:

Through their ownership of 90.03% of DFS’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 52.23% of DFS, in contrast to 34.64% held by mutual funds. Shares owned by individuals account for 1.50%. As the largest shareholder in DFS with 13.25% of the stake, The Vanguard Group, Inc. holds 33,633,929 shares worth 33,633,929. A second-largest stockholder of DFS, Capital Research & Management Co, holds 21,267,062 shares, controlling over 8.38% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in DFS, holding 12,995,126 shares or 5.12% stake. With a 3.20% stake in DFS, the Vanguard Total Stock Market ETF is the largest stakeholder. A total of 8,133,911 shares are owned by the mutual fund manager. The Washington Mutual Investors Fund, which owns about 2.90% of DFS stock, is the second-largest Mutual Fund holder. It holds 7,370,221 shares valued at 762.6 million. Vanguard 500 Index Fund holds 2.47% of the stake in DFS, owning 6,265,957 shares worth 648.34 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for DFS since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With DFS analysts setting a high price target of $129.00 and a low target of $101.00, the average target price over the next 12 months is $117.28. Based on these targets, DFS could surge 29.15% to reach the target high and rise by 1.12% to reach the target low. Reaching the average price target will result in a growth of 17.42% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded DFS stock several times over the past three months with 0 Buys and 1 Sells. In these transactions, 0 shares were bought while 13,477 shares were sold. The number of buy transactions has increased to 20 while that of sell transactions has risen to 24 over the past year. The total number of shares bought during that period was 310,326 while 190,695 shares were sold.

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