DFS Intrinsic Value Calculation – Citi Upgrades Discover Financial to ‘Buy’, Anticipates Catalysts for 2024

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Citi recently upgraded Discover Financial Services ($NYSE:DFS) to a Buy rating, citing potential catalysts for 2024. Discover Financial Services is a multinational financial services company, providing customers with a range of banking and payment services, including credit cards, loans, and savings accounts. It works with over twenty financial institutions to provide services to over fifty million customers. Citi analysts expressed their optimism with Discover Financial, noting that the company is in a good position to benefit from various catalysts set to take effect in the near future. These include the launch of its premium rewards card, the Discover it Miles+ Card, as well as the expansion of its direct-to-consumer business.

Additionally, Citi anticipates that Discover will benefit from increased spending and loan growth over the next few years and will be able to capitalize on the changing landscape of the consumer lending industry. The upgrade reflects the potential that Discover Financial has in terms of growth and profitability for the foreseeable future. With its strong portfolio of products and services, Citi believes that Discover Financial is well-positioned to take advantage of an increasing number of catalysts in the coming years. As such, Citi recommends investors take a closer look at Discover Financial in order to capitalize on these upcoming opportunities.

Price History

On Wednesday, the stock of DISCOVER FINANCIAL SERVICES opened at $110.3 and closed at $107.6, down by 1.2% from the previous closing price of 109.0. This was despite Citi upgrading the stock to ‘Buy’ and anticipating catalysts for 2024. The upgraded rating from Citi came as a surprise for many analysts, as the firm previously maintained a ‘Hold’ rating on Discover.

Citi’s upgraded rating suggests significant growth potential for Discover in the future, as it anticipates positive catalysts that are likely to drive stock prices higher in 2024. Analysts believe that this upgrade will likely result in a positive momentum for the stock in the near term. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for DFS. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for DFS. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for DFS. More…

Key Ratios Snapshot

Some of the financial key ratios for DFS are shown below. More…

Analysis – DFS Intrinsic Value Calculation

At GoodWhale, we are always looking to provide our clients with the best insights into their investments. We have recently completed an analysis of the financials of DISCOVER FINANCIAL SERVICES. Our proprietary Valuation Line has given us a fair value of DISCOVER FINANCIAL SERVICES share of about $144.1. This is greater than its current share price of $107.6, meaning that the stock is undervalued by about 25.4%. This is a great opportunity for investors to buy the stock at a discounted rate and benefit from the potential upside of the stock when it reaches its fair value. We are confident that our analysis will help our clients make informed decisions when investing in DISCOVER FINANCIAL SERVICES. More…

Peers

Discover is headquartered in Riverwoods, Illinois and has operations in the United States, Canada, and the United Kingdom. The company’s primary competitors are SoFi Technologies Inc, American Express Co, Enova International Inc.

– SoFi Technologies Inc ($NASDAQ:SOFI)

SoFi Technologies Inc is a company that provides financial services. As of 2022, its market cap is 4.77B. The company offers products and services such as student loan refinancing, personal loans, and mortgages. It also has a mobile app that allows users to track their spending and manage their finances.

– American Express Co ($NYSE:AXP)

American Express Co is a financial services company with a market cap of 105.83B as of 2022. The company provides credit cards, charge cards, and traveler’s checks to consumers and businesses worldwide. It also operates an online travel portal and a global network of branded merchandise stores. In addition, American Express Co provides financial advisory, risk management, and insurance services to businesses and individuals.

– Enova International Inc ($NYSE:ENVA)

Enova International Inc is a provider of online financial services. The company offers loans, lines of credit, and merchant cash advances to small businesses and consumers. Enova International Inc has a market cap of 996.81M as of 2022, a Return on Equity of 19.42%. The company’s primary product is its small business loan product, which offers loans of up to $150,000.

Summary

Discover Financial Services has recently been upgraded to a Buy rating by Citi, with the analysts citing potential catalysts in place for 2024. The company has a wide range of products and services, including credit cards, personal loans, banking, and payment services. It also offers rewards programs that reward customers for using their Discover products. Investing in Discover Financial Services may be attractive to those looking for a company with strong fundamentals and growth potential.

Analysts point to the company’s credit card division as particularly attractive due to its favorable performance in recent years. Furthermore, the company’s investments in emerging technology such as artificial intelligence and blockchain are also considered positive catalysts for future growth.