Discover Financial Services
Latest Discover Financial Services News and Updates
AXP’s Valuations Down in 4Q15, Targeted $1 Billion in Savings
American Express (AXP) expects its full-year 2016 EPS to be between $5.40–$5.70. It looks to return to positive EPS growth in 2016 and is targeting a minimum of $5.60 EPS for 2017.
What New Developments Can You Expect from the Fed?
Potential new developments from the Fed include a suggestion by the subcommittee on communications that median values of policymakers’ projections be published.
Mergers and Marketing Efforts Pressure MasterCard’s Margins
MasterCard’s rebates and incentives rose by 18% to $1.0 billion in 1Q16—higher than expected, mainly due to the timing of some deals and acquisitions.
A Look at Capital One’s Valuations
Capital One Financial Corporation’s (COF) PE (price-to-earnings) ratio is 8.77x on an NTM basis compared to its competitors’ average PE ratio of 20.79x.
Visa Expected to Post Healthy Margins in Fiscal 3Q16
Visa (V) has maintained its operating margin above 60% over the past few years. The company’s major expenses include personnel, marketing, network and processing, and professional fees.
Increased Spending, Electronic Payments Beneficial for Visa
Visa’s total transactions grew by 11% on a YoY (year-over-year) basis in fiscal 4Q15. The company reported total transactions of 27.9 billion in fiscal 4Q15, as compared to 25 billion in fiscal 4Q14.
How Payment Processors Are Performing amid Challenges in 2016
Payment processors are seeing major changes in 2016, including increased competition on pricing and the adoption of new technologies such as wearables.
Which Payment Processor Has the Highest Payouts and Repurchases?
Payment processors are rewarding their shareholders with 1%–2% dividend yields, largely dependent on operating performance.
MasterCard’s Leverage Is Comfortable for Expansion, Acquisitions
MasterCard (MA) has debt of $3.3 billion with a total balance sheet of $15.9 billion as of March 31, 2016. This compares to $16.2 billion in 4Q15.
Can American Express Distributions Continue to Attract Investors?
American Express (AXP) has been using its strong balance sheet position to consistently declare dividends to its shareholders.
American Express: Opportunities Abound in a Challenging Market
Co-branding relationships are an important part of the American Express business model. The costs of renewing and extending these relationships is increasing.
Discover Financial Services: Assessing Analysts’ Ratings
Five analysts suggested a “hold,” one recommended a “strong sell,” and nine recommended a “strong buy” on DFS stock.
Investors should watch Discover’s stock in the longer term
Discover Financial’s (DFS) stock price rose from $14.70 at the end of 2009 to $65.50 at the end of 2014. This is an increase of 346%.
The Future of PayPal: Interpreting 4Q16
PayPal’s faces competition from almost all angles. But its peer-to-peer payment service, Venmo, has become a source of great hope.
Payment Processors Dividends Are Now Rising on This
Payment processors are rewarding their shareholders with dividend yields of 1%–2%, depending largely on operating performance.
Best Buy Will Support Apple Pay in 2H15
Apple is reportedly in talks with major banks in Canada, and it partnered with Union Pay in China last year to broaden the reach of Apple Pay.
Visa Establishes Partnerships to Expand in China
Visa announced partnerships with the China Foundation for Development of Financial Education and the China Foundation for Poverty Alleviation.
Analyzing Visa’s Valuation after Its Q2 Earnings
Visa (V) is trading at a forward PE ratio of 27.7x, which is higher than its five-year average PE ratio of 24.5x.
Why Disney Is Spending $25 Million per Year on Staff Education
The Walt Disney Company is among those large American companies that have launched back-to-school programs for their employees.
Improving Economy and Retail Sales to Boost Mastercard’s Q3 Results
A healthy job market and a steady hike in wages have increased the spending power of consumers.
What Will Drive Mastercard’s Third-Quarter Earnings?
Mastercard (MA) is scheduled to report its third-quarter results on October 30.
Visa’s Q4 Results to Gain from Improving Economy and Retail Sales
The US GDP grew 4.2% in the second quarter, which was almost double the 2.2% increase registered in the first quarter.
Higher Payment Volumes to Drive Visa’s Q4 2018 Earnings
Visa (V) plans to report its Q4 2018 earnings on October 24. Analysts expect Visa to report EPS of $1.20, marking YoY growth of 33.3%.
Mastercard to Gain from Improving Economy and Rising Retail Sales
The Consumer Confidence Index increased to 133.4 in August from 127.9 in July—its highest reading since its October 2000 reading of 135.8.
Improving GDP and Retail Sales Could Boost Visa’s Platform Usage
Improving GDP growth, a healthy job market, and steady wage growth have increased the disposable income of consumers, thereby giving them greater spending power.
Visa Sizzles on Strong Digitization Trends and Improving Economy
Visa stock (V), which was around $78 at the beginning of 2017, now trades close to $143, a jump of over 83%.
How Analysts Rate Mastercard
Analysts’ rating on Mastercard (MA) improved in July compared to June.
Understanding Visa’s Take on Contactless Payments
Visa (V) has been making efforts to increase the use of contactless payments in the United States after experiencing a positive response.
Mastercard Has Premium Valuations after Strong Q2 2018 Results
Mastercard (MA) has a price-to-earnings ratio of 28.04x on an NTM (next-12-month) basis compared to the peer average of 15.95x.
How Mastercard’s Gross Dollar Volumes and Net Revenues Trended
In the second quarter, Mastercard (MA) witnessed total gross dollar volumes (or GDV) of $1.5 trillion.
Discover Financial’s Q2 2018: Total Loans Grew 9% Year-over-Year
On July 26, Discover Financial Services (DFS) released its earnings report for the second quarter.
Visa’s Payments Volumes Could Fuel Its Growth
On July 25, Visa (V) is scheduled to report its results for the third fiscal quarter. Analysts expect Visa to post an EPS of $1.09.
Mastercard’s Q2 Preview: Spending, Macro Data Could Be Drivers
Mastercard (MA) is set to release its second-quarter earnings report on July 26. What can we expect?
Capital One’s Net Interest Margin Fell in the Second Quarter
Capital One Financial (COF) posted second-quarter results on July 19.
American Express in Q2: Drivers Could Be Loan Growth, Spending
On July 18, American Express (AXP) is expected to report its Q2 2018. Analysts expect EPS to be $1.82 compared to $1.86 in the first quarter.
Capital One’s Q2: Expectations Amid Trade Wars, Improved Economy
Capital One (COF) is expected to release its Q2 2018 earnings on July 19. Analysts expect EPS of $2.68, a YoY rise of 38.1%.
What Factors Could Influence Analysts’ Ratings on Discover?
Growing trade tensions are a primary concern, as they could impact the performances of Discover Financial Services (DFS) and its peers.
What Discover Financial Has in Mind Moving Forward
Discover Financial Services (DFS) generated net interest income amounting to $2.1 billion in the first quarter.
What’s behind Mastercard’s Co-Brand Wins?
The economic and business environment prevailing in an economy affects the business fundamentals of payment processing giants like Visa (V) and Mastercard (MA).
How Analysts View American Express Stock
In June, eight of the 32 analysts covering the stock have given it a “buy” rating, and two analysts have given it a “strong sell.”
What’s Affected Consumer Finance Companies Recently?
On June 25, the Dow Jones Industrial Average saw strong downward pressure primarily due to escalating US-China trade tensions.
American Express: What the Second Quarter Holds
The second quarter could be beneficial for American Express (AXP) due to an expected rise in consumer loans and transactions.
Mastercard’s Strong Results Beat Earnings and Revenue Estimates
Mastercard (MA) released its earnings report this morning. The company reported earnings per share or EPS of $1.50 in 1Q18.
Why Visa Has Premium Valuations
Visa’s (V) price-to-book ratio stands at 6.83x on a next-12-month basis, implying a premium valuation compared to its peer average of 3.09x.
An Analysis of These Components of Visa’s Net Operating Revenue
Of its total fiscal 1Q18 net operating revenue of $4.9 billion, Visa’s service revenue made up $2.1 billion, or 44.1%.
Visa–Fraedom Acquisition to Benefit Business-to-Business Payments
Visa (V) announced its acquisition of Fraedom, which provides payment solutions for financial institutions.
Behind Discover Financial Services’ Discounted Valuations
Discover Financial Services (DFS) has a PE (price-to-earnings) ratio on an NTM (next 12-month) basis of 10.26x, while the average for its peers is 13.97x.
Analyzing Visa’s Assets and Liabilities
As of September 30, 2016, Visa (V) has reported a total asset balance of $64.03 billion. As of June 30, 2017, the company managed to report a total asset balance of $64.00 billion.
International Business for American Express and Mastercard
American Express (AXP) witnessed a rise of 12.0% in its proprietary cards volume in 2Q17, which reflects a marginal increase of 1.0% from 1Q17.
Visa, American Express, MasterCard Beat Analyst Estimates
Consumer financial companies such as American Express (AXP), Mastercard (MA), and Visa (V) beat analysts’ estimates for EPS (earnings per share) in 2Q17.
Visa Expands Its Footprint in Europe
Visa (V) will report its fiscal 3Q17 earnings on July 20, 2017. Wall Street analysts expect Visa to report EPS of $0.81 per share—a decline of 5.8%.
American Express’s International Business Revenues Improve
American Express’s (AXP) International Consumer and Network Services segment reported a 16.0% rise YoY (year-over-year) in net income for 1Q17.
American Express to Ride on Partnerships, Digitization
American Express (or Amex) (AXP) has entered into digital partnerships with Airbnb, Facebook (FB), and Uber in order to offset the revenue loss from Costco (COST).
How MasterCard Plans to Expand Presence in Middle East
MasterCard’s (MA) growth trajectory in the Middle East is expected to continue in the upcoming quarters.
Can Visa Sustain Its Premium Valuations?
Analysts have a positive outlook on Visa (V) for the rest of fiscal 2017 mainly due to the company’s expansion plans in the Asia-Pacific region and its strong payment volume projections.
Why Visa’s Repurchase Program Is Getting Investor Attention
Over the past five years, Visa (V) has spent $20 billion in various buyback programs.
Growth Trajectory in Visa’s Payments Volume to Continue
Visa (V) management expects its payments volume to continue in 2H17.
MasterCard Enhances Repurchases, Operating Flows Grow
MasterCard (MA) generated $4.5 billion in operating cash flows for 2016. That’s a rise of 10.9% on a year-over-year basis.
What Do Analyst Ratings Suggest for Visa’s Performance in 2017?
32 of the 36 analysts covering Visa (V) rated it a “buy” or “strong buy” in March 2017.
Visa Is Investing in Innovative Solutions and Emerging Markets
The payment processing industry is witnessing major changes globally due to regulatory changes, increased competition, and a demand for continual innovation.
Visa Commanding Premium Valuations on Expected Growth in 2017
Visa is trading at ~21.3x on a one-year forward earnings basis. Its peers are trading at an average of 16.4x.
Visa’s Leverage Is Stable after Europe Acquisition and Repurchases
Visa (V) increased its leverage, including current maturities and long-term debt, to $16.4 billion in fiscal 1Q17 against total equity of $31.7 billion in 1Q16.
Visa’s Transactions Helped by Cross Border, Europe, and Asia
Visa (V) reported a total of 40.8 billion transactions in fiscal 1Q17, compared to 29.0 billion in fiscal 1Q16. That’s a rise of 41.0% year-over-year.
Amex’s Valuation Is Fair amid a Volatile Operating Performance
American Express expects its earnings per share to be between $5.60 and $5.80 in 2017 on the back of revenue growth, marketing spending, and operating expenses.
Will MasterCard’s Processed Transactions Rise in Q4?
MasterCard (MA) has seen a steady rise in processed transactions on the back of rising transactions in international markets.
AXP’s Global Commercial Services Segment Sees a Steady Top Line
American Express’s (AXP) Global Commercial Services (or GCS) segment formed 31% of the company’s total revenue in 4Q16, in line with the previous quarter.
AXP’s International Business Impacted by Spending, Dollar
American Express’s (AXP) International Card Services segment’s revenue rose 2% to $1.4 billion in 4Q16, compared to $1.3 billion in 4Q15.
Understanding Visa’s and MasterCard’s Higher Valuations
Visa (V) has been commanding premium valuations over the past few years on a strong brand, high growth, diversified portfolio, and improved technology.
Will Payment Processors Keep Seeing the US Dollar Impact in 2017?
Payment processors are now seeing improved performances on increased spending, new technologies, expansion into global markets, and the stable US dollar.
Visa and MasterCard See a Strong Rise in Transactions, Volumes
Consumers are making more payments through mobile platforms and internet-based purchases, which has been beneficial for the payment processing industry.
Is Buffett’s Bet Boosting Amex’s Valuations?
Amex expects its EPS to be between $5.65 and $5.75 in fiscal 2016, including the restructuring charges of first three fiscal quarters of the year.
Visa’s Valuation Premium Is Intact on Its Relative Outperformance
Visa’s (V) stock has risen 15% over the past six months, mainly due to consumer spending, new partnerships, and geographic expansion.
Visa Maintains Its Margins following the Visa Europe Merger
Visa (V) posted an operating profit margin of 64% in fiscal 4Q16, in line with the prior year’s quarter and lower than the previous quarter’s 68%.
Pay Attention to Visa’s Efforts to Fund Growth with Debt
In the June 2016 quarter, Visa (V) added another $5 billion to its share repurchase program, bringing the total to $7.3 billion.
Low 3Q Growth Expectations for Amex’s Global Network Services
American Express’s (AXP) Global Network and Merchant Services segment contributes 14% of the company’s total revenues.
Amex Targets Higher Growth in International Business in 3Q
American Express (AXP) has been looking to expand its business internationally amid high competition in the domestic markets.
MasterCard Commands Premium Valuations on Core Growth
Currently, MasterCard (MA) is trading at 24.7x on a one-year forward earnings basis. Its peers are trading at an average of 18.1x.
MasterCard Deploys Higher Rebates for Market Share
MasterCard’s 2Q16 operating expenses, after excluding non-operating items, rose 12%–13% on similar currencies.
MasterCard Processed Transactions Rise at a Record Pace
More than 60% of MasterCard’s (MA) business comes from its International segment. The company benefits from partnerships, corporate programs, and rebates in Europe and Asia.
MasterCard Generates Strong Cash Flows, Less Leverage
MasterCard saw its EPS rise 10% in 2Q16. The company expects to generate higher net EPS on stable currency in 2016.
Amex’s Valuations Imply Slower Growth and Uncertainty
American Express (AXP) expects its EPS to be adversely affected year-over-year. It expects its 2016 EPS to be $5.40–$5.70.
Expectations Call for Amex’s Yields, Repurchases to Rise in 2017
American Express’s (AXP) adjusted net profits rose 7% in the June quarter on increased spending, especially in international markets.
Global Network and Merchant Services Expected to Be Low in 3Q
American Express’s (AXP) Global Network and Merchant Services segment’s revenues are expected to be low in the September quarter. The division operates a global payments network.
Amex’s Global Commercial Services Rising on Initiatives
American Express’s (AXP) Global Commercial Services segment’s total revenues, net of interest expenses, remained flat at $2.5 billion in 2Q16.
International Growth Continues to Offset Amex’s Domestic Slide
American Express’s (AXP) revenue decline in the domestic market has been partially offset by growth in international markets.
American Express Faces Stiff Competition in the United States
American Express’s (or Amex) (AXP) US Card Services segment has had strong competition from local players on the incentives front as well as in striking new partnerships.
Visa Commands Premium Valuations on Strong Performance
Visa (V) stock has risen by 12% over the past six months as a result of strong consumer spending, the addition of new clients, and volume growth from existing clients.
Visa Europe Buy, Buyback Program Are Feathers in Visa’s Cap
Visa (V) announced a new $5 billion share repurchase program, which increases the total available for share repurchases to $7.3 billion.
International Use to Boost Visa’s Fiscal 4Q16 Processed Transactions
Visa (V) reported total transactions of $30.2 billion in fiscal 3Q16, compared to $27 billion in fiscal 3Q15—a growth of 11.8% year-over-year.
How Visa’s Valuation Was Impacted by Visa Europe Buy
Visa’s full-year operating cash flows in fiscal 2016 are expected to be $7 billion.
How Visa’s Operating Profit Margins Beat Its Competitors
Visa (V) reported total transactions of $30.2 billion in 3Q16 compared to $27 billion in 3Q15, a growth of 11.8% year-over-year.
Visa Manages to Lower Expenses in Fiscal 3Q16
Visa expects 2% to 3% expense growth for legacy Visa in 4Q16 from marketing and higher technology project spending related to the Rio Olympics.
Why Amex’s US Consumer Service Revenues Fell in Q2
American Express’s (AXP) US Card Services segment’s total revenues, net of interest expenses, fell 3% to $3.2 billion in 2Q16.
American Express’s Shareholders Payouts Continue in 2Q16
American Express’s (AXP) adjusted net profits fell by 6% in 1Q16 on a strong dollar, increased competition, and higher spending.
American Express’s Valuations after Brexit Vote, 2Q16 Expectations
American Express expects its 2016 EPS to be $5.40–$5.70. It expects to return to positive EPS growth in 2016 and is targeting a minimum of $5.60 for 2017.
Amex’s Global Network and Merchant Services Segment in 2Q16
Amex’s (AXP) Global Network and Merchant Services segment formed 14% of the company’s total revenues. The segment’s total revenues, net of interest expense, fell by 3% to $1.1 billion in 1Q16.
Payment Processors Add Leverage for Organic, Inorganic Expansions
Payment processors have increased their leverages for the purpose of organic and inorganic expansions.
How Visa Manages High Operating Margins in a Competitive Business
Visa (V) has maintained its operating margin above 60% over the past few years.
How Is MasterCard Posting Operating Margin in Mid-50%?
MasterCard posted an operating margin of 55% in 1Q16, which was in line with the prior year’s quarter. Operating income remained flat.
MasterCard Transactions Benefit from International Growth
In 1Q16, MasterCard (MA) reported total processed transactions of 12.6 billion compared to 11.0 billion in the prior year’s quarter.