Discover Financial Services (DFS)

Discover Financial Services (DFS) stock dropped by 10.80% due to the company's announcement of its fourth-quarter 2023 results, which did not align with Wall Street's projections.

• Financial Performance: In terms of revenue, Discover's fourth-quarter results showed promise, with a 13% year-over-year growth to reach $4.196 billion. This surpassed the consensus estimate of $4.11 billion. However, the bottom line told a different story, as Discover's net income declined to $388 million, equivalent to $1.54 per share. This marked a substantial 59% decrease from the $3.74 per share reported during the same period in the previous year, falling significantly short of the expected $2.51 per share.
• Future Projections: Looking ahead to 2024, Discover anticipates that loan growth will remain relatively flat compared to the 15% growth seen in 2023. Additionally, the net interest margin is expected to contract, falling within the range of 10.5% to 10.8%, down from 11.07% reported for the entire year of 2023. The company also foresees an increase in net charge-offs to approximately 4.9% to 5.3% in 2024, compared to 3.42% in the previous year.
• Investor Sentiment: In light of the significant profit shortfall in the most recent quarter, investors are understandably concerned. While Discover has shown resilience in managing risks and maintaining profitability despite rising charge-off rates, the stock has responded to the disappointing earnings report with a sharp decline.

Discover Financial Services (DFS) dropped by 7.90% from $91.85 to $84.59 in the trading on Thursday October 19, 2023. The reason why DFS stock down today is due to the weaker-than-expected Q3 earnings. Q3 earnings missed as charge-offs increased, seemed to weigh on the stock as did the broader market sell-off, causing DFS stock down today.

• Q3 EPS of $2.59, trailing the $3.17 average analyst estimate, dropped from $3.54 in the previous quarter and $3.57 a year ago.
• Revenue climbed to $4.04B, topping the $3.96B consensus, from $3.87B in Q2 and $3.47B in Q3 2022.
• Operating expenses climbed to $1.45B from $1.40B in the previous quarter and $1.37B in the year-ago period.

Discover Financial Services stocks fell 9.44% after CEO and board member Roger Hochschild's unexpected resignation, leaving investors surprised.

https://www.fool.com/investing/2023/08/15/why-discover-financial-services-stock-got-thrashed/

Discover Financial Services shares plunged around 15.92% today following the company's earnings report, which revealed both lower-than-expected earnings and revenue. However, the primary concern stems from a regulatory problem as Discover admitted to mispricing merchant fees on certain credit card accounts.

https://www.fool.com/investing/2023/07/20/why-shares-of-discover-financial-services-are-plun/