Discover Financial Services Shares Are Down Today: What's Going On?

Ladies and gentlemen, buckle up! We've got a situation brewing with Discover Financial Services (DFS) shares, and you need to know what's going on. The stock has taken a nosedive, and it's time to figure out why. Let's dive in!

First things first, let's talk about the numbers. DFS shares have dropped from $164.26 to $151.97, a 7.48% decline. Ouch! That's a significant hit, and it's got investors scratching their heads. But don't panic just yet—there's more to the story.



Analysts are still bullish on DFS. The average rating is a "Buy," with 15 out of 20 analysts recommending it. Brian Foran from Truist Securities has a "Strong Buy" rating with a price target of $262, indicating a potential upside of 72.41%. Terry Ma from Barclays has a "Buy" rating with a price target of $209, suggesting a 37.53% upside. These ratings are a strong signal that DFS is a promising investment opportunity.

But why the drop? One factor could be the recent changes in analyst ratings. UBS analyst Erika Najarian upgraded DFS from Neutral to Buy with a price target of $239.00 (from $150.00) on January 13, 2025. Deutsche Bank raised its price target for Discover to $202 from $167 on January 3, 2025, indicating a 22.98% upside. These changes suggest that the stock has the potential for significant upside, but the market may not have fully priced in this positive outlook yet.

Another factor could be the company's financial performance. In 2024, DFS's revenue was $13.00 billion, an increase of 32.97% compared to the previous year's $9.78 billion. Earnings were $4.45 billion, an increase of 63.76%. However, the company's earnings per share (EPS) for the current year is $13.85, a decrease of 21.81% from the previous year's $17.71. This decline in EPS may be contributing to the recent decline in the stock price, as investors may be concerned about the company's ability to maintain its earnings growth.

But here's the kicker: the proposed merger with Capital One. This acquisition has been approved by more than 99.8% of the Capital One shares and 99.8% of the Discover shares, indicating strong support from both companies' stockholders. The merger is expected to create a larger, more diversified financial services company, which could lead to increased market share, economies of scale, and enhanced competitive positioning. This strategic initiative is likely to drive long-term growth and stability for Discover Financial Services, potentially leading to a positive impact on its stock performance.



So, what do you do now? Do you sell, hold, or buy more? The answer is simple: BUY MORE! This is a temporary setback, and the company's long-term prospects remain positive. The merger with Capital One is a game-changer, and DFS is poised for significant growth. Don't miss out on this opportunity—get in now and ride the wave to the top!

Remember, the market is a fickle beast, and it hates uncertainty. But with DFS, the uncertainty is clearing up, and the future is looking bright. So, stay calm, stay focused, and keep your eyes on the prize. DFS is a winner, and you need to own it!

Boo-yah! This stock’s a winner!