Fubotv earnings beat by $0.10, revenue topped estimates
On Wednesday, Discover Financial Services (NYSE:DFS) experienced a change in its stock rating, as analysts at Jefferies downgraded the company from ’Buy’ to ’Hold’. Alongside the rating adjustment, Jefferies set a price target for Discover Financial shares at $180.00. Currently trading at $188.12, the company boasts a market capitalization of $47.3 billion and trades at an attractive P/E ratio of 10.1x. According to InvestingPro data, Discover Financial has maintained dividend payments for 19 consecutive years, demonstrating strong financial stability.
The revision in the rating comes as Discover Financial’s first-quarter results displayed persistent positive momentum for the company as an independent entity, with impressive revenue growth of 35.9% and a robust gross profit margin of 94.4%. However, the downgrade to ’Hold’ was prompted by the nearing completion of a significant transaction set for May 18th. The specifics of this deal are now a key factor influencing Discover Financial’s stock, as noted by Jefferies analysts. InvestingPro analysis reveals the company maintains a GREAT overall financial health score, with particularly strong marks in profit and price momentum metrics.
Jefferies analysts maintain a positive outlook on the potential of the combined entity once the deal is finalized. They anticipate substantial upside and have accordingly adjusted their proforma earnings per share (EPS) expectations upward.
The deal’s impending closure has effectively linked Discover Financial’s stock performance to the transaction details, prompting Jefferies to adjust their stance on the stock’s rating. The analysts’ comments suggest that while the standalone prospects of Discover Financial are solid, the focus has shifted to the anticipated benefits of the upcoming merger.
Investors and market watchers are now likely to keep a close eye on Discover Financial’s stock as the May 18th date for the deal’s completion approaches. The updated proforma EPS and the potential for significant upside post-transaction are key points of interest following this rating change.
In other recent news, Discover Financial Services reported impressive first-quarter earnings for 2025, surpassing Wall Street estimates. The company achieved earnings per share of $4.25, significantly exceeding the projected $3.35, and generated revenue of $4.25 billion, slightly above the expected $4.23 billion. Discover’s net income rose by 30% year-over-year to $1.1 billion, reflecting strong financial performance. The company is also preparing for its merger with Capital One (NYSE:COF), which is anticipated to close on May 18, 2025. This merger has received necessary approvals from regulatory bodies, including the Federal Reserve Board and the Office of the Comptroller of the Currency. Analysts have noted the potential for increased competition and innovation within the payment networks sector post-merger. Discover’s strategic focus on direct-to-consumer deposit growth and conservative underwriting has contributed to its robust financial position. The company’s net interest margin expanded to 12.18%, marking an increase of 115 basis points year-over-year. Despite a slight increase in operating expenses, Discover’s operational efficiency remains commendable.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.