Discover Financial Services (DFS)

The past six months have seen significant events impacting Discover Financial Services' stock price. Capital One announced its agreement to acquire Discover on February 20, 2024, which closed on May 18, 2025, leading to credit rating upgrades. Discover reported strong fourth-quarter 2024 results on January 22, 2025, and first-quarter 2025 results on April 23, 2025. In January 2025, UBS upgraded Discover from Neutral to Buy, and Truist Securities and Barclays initiated coverage with Buy and Overweight recommendations, respectively. As of May 16, 2025, DFS stock was up 27.98% over the past 30 days and 60.28% over the past 12 months.

Discover's products and services exhibit some demand seasonality. Total loans can be affected by seasonal trends, as seen in the first quarter of 2025. The credit card net charge-off rate also showed an increase quarter-over-quarter due to seasonal trends in Q1 2025. Personal loan losses are expected to trend higher in the near term before plateauing in late 2024 or into 2025. PULSE dollar volume has shown increases driven by increased debit transaction volume, and Diners Club volume has reflected strength in global travel and entertainment.

Discover Financial Services is a prominent player in the financial services sector, primarily known for its credit card issuance and payment processing. Founded in 1986, the company operates through two main segments: Direct Banking and Payment Services. Its major products and services include credit card issuance with various reward options, consumer banking products through Discover Bank, and payment services through the Discover Global Network, including PULSE Network and Diners Club International.

Discover Financial Services primarily targets markets in the United States. Through its Discover Global Network, the company has an international presence. The Discover Global Network is accepted in over 200 countries and territories.

Discover has maintained a strong brand reputation by focusing on customer satisfaction and service. The company is known for its customer-focused approach, offering no annual fees, cash rewards, and U.S.-based customer service. Discover was voted as the best place to work for Large US companies on Glassdoor in 2021. The acquisition by Capital One is expected to further enhance Discover's reputation. Discover has faced challenges, including a merchant card product misclassification litigation and consent orders from regulatory bodies, but has been enhancing its governance and compliance systems.

Discover Financial Services has a mixed ownership structure, including institutional, retail, and individual investors. Institutional investors own approximately 33.67% to 43.27% of the company's stock, with key holders including Vanguard Group Inc., Capital World Investors, and BlackRock, Inc. Insiders own approximately 0.18% of the company's stock. Public companies and individual investors own a significant portion, ranging from 9.59% to 80.33%.