Discover Financial Services (NYSE:DFS) Sees Large Drop in Short Interest

Discover Financial Services (NYSE:DFS) saw a significant drop in short interest in September. As of September 30th, there was short interest totalling 5,480,000 shares, a drop of 8.2% from the August 30th total of 5,970,000 shares. Based on an average daily trading volume, of 1,970,000 shares, the short-interest ratio is presently 2.8 days. Approximately 1.7% of the shares of the stock are sold short.

Several equities analysts have weighed in on the company. Wells Fargo & Co reissued a “hold” rating on shares of Discover Financial Services in a research report on Monday. Nomura raised their price target on Discover Financial Services from $86.00 to $96.00 and gave the stock a “buy” rating in a research report on Wednesday, July 24th. Bank of America assumed coverage on Discover Financial Services in a research report on Wednesday, June 19th. They set a “neutral” rating for the company. Zacks Investment Research upgraded Discover Financial Services from a “hold” rating to a “buy” rating and set a $86.00 price objective on the stock in a report on Monday, September 9th. Finally, Morgan Stanley set a $97.00 price objective on Discover Financial Services and gave the stock a “buy” rating in a report on Friday, August 9th. One analyst has rated the stock with a sell rating, ten have issued a hold rating and eight have issued a buy rating to the company. The stock presently has an average rating of “Hold” and a consensus price target of $85.53.

In other Discover Financial Services news, CFO R. Mark Graf sold 4,776 shares of the firm’s stock in a transaction on Thursday, July 25th. The stock was sold at an average price of $92.44, for a total transaction of $441,493.44. Following the completion of the transaction, the chief financial officer now owns 51,296 shares of the company’s stock, valued at $4,741,802.24. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, Director Mary K. Bush sold 993 shares of the firm’s stock in a transaction on Tuesday, August 6th. The stock was sold at an average price of $83.27, for a total value of $82,687.11. Following the transaction, the director now directly owns 52,075 shares of the company’s stock, valued at approximately $4,336,285.25. The disclosure for this sale can be found here. Insiders have sold 27,663 shares of company stock valued at $2,534,291 in the last three months. 0.81% of the stock is currently owned by company insiders.

Institutional investors have recently modified their holdings of the stock. Hanseatic Management Services Inc. acquired a new position in Discover Financial Services in the second quarter valued at $157,000. Calamos Advisors LLC boosted its holdings in Discover Financial Services by 1.7% in the second quarter. Calamos Advisors LLC now owns 257,301 shares of the financial services provider’s stock valued at $19,964,000 after acquiring an additional 4,184 shares during the last quarter. Prudential PLC boosted its holdings in Discover Financial Services by 1.4% in the second quarter. Prudential PLC now owns 309,030 shares of the financial services provider’s stock valued at $24,104,000 after acquiring an additional 4,356 shares during the last quarter. AE Wealth Management LLC acquired a new position in Discover Financial Services in the second quarter valued at $343,000. Finally, First Trust Advisors LP boosted its holdings in Discover Financial Services by 8.7% in the first quarter. First Trust Advisors LP now owns 857,450 shares of the financial services provider’s stock valued at $61,016,000 after acquiring an additional 68,369 shares during the last quarter. Hedge funds and other institutional investors own 85.02% of the company’s stock.

Shares of DFS stock traded up $0.12 during mid-day trading on Thursday, hitting $78.68. 536,184 shares of the company’s stock were exchanged, compared to its average volume of 1,963,754. Discover Financial Services has a fifty-two week low of $54.36 and a fifty-two week high of $92.98. The stock has a 50-day simple moving average of $80.62 and a two-hundred day simple moving average of $79.74. The company has a quick ratio of 1.33, a current ratio of 1.33 and a debt-to-equity ratio of 2.30. The stock has a market cap of $24.74 billion, a price-to-earnings ratio of 10.10, a PEG ratio of 1.14 and a beta of 1.61.

Discover Financial Services (NYSE:DFS) last posted its quarterly earnings data on Tuesday, July 23rd. The financial services provider reported $2.32 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.11 by $0.21. Discover Financial Services had a return on equity of 26.76% and a net margin of 21.00%. The business had revenue of $2.98 billion for the quarter, compared to analysts’ expectations of $2.81 billion. During the same quarter last year, the firm earned $1.91 earnings per share. The business’s revenue was up 12.9% on a year-over-year basis. As a group, analysts anticipate that Discover Financial Services will post 9 earnings per share for the current fiscal year.

The company also recently announced a quarterly dividend, which will be paid on Thursday, December 5th. Investors of record on Thursday, November 21st will be issued a $0.44 dividend. This represents a $1.76 dividend on an annualized basis and a yield of 2.24%. Discover Financial Services’s payout ratio is currently 22.59%.

About Discover Financial Services

Discover Financial Services, through its subsidiaries, operates as a direct banking and payment services company in the United States. The Direct Banking segment offers Discover-branded credit cards to individuals; and other consumer products and services, including private student loans, personal loans, home equity loans, and other consumer lending, as well as deposit products, such as certificates of deposit, money market accounts, savings accounts, checking accounts, and individual retirement arrangement certificates of deposit.

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