Capital One's stock looks like a bargain following Discover acquisition
Capital One will be even more focused on credit-card lending now that it has completed the Discover deal.
Fiscal Year: January - December
Discover Financial Services (DFS), listed on the NYSE, has a market capitalization of $33.96B. As of May 20, 2025, the stock is trading at $200.05 per share, offering investors a clear view of its current market value. Discover Financial Services is a prominent player in the industry sector, attracting both institutional and retail investors due to its performance and potential.
With a P/E ratio of 10.7, investors can assess the stock's valuation in comparison to its earnings. A P/E ratio is a crucial indicator for value investors, showing whether the stock is over or undervalued relative to its current earnings. Discover Financial Services also offers a dividend yield of 1.4%, making it an attractive option for income-focused investors who seek regular dividends.
Our Discounted Cash Flow (DCF) analysis reveals that Discover Financial Services (DFS) may be overvalued compared to its intrinsic worth. However, to see the exact DCF fair value, please Login or Upgrade for access.
The proprietary SS Score for Discover Financial Services is a unique metric that analyzes the company's financial health and growth potential. The score takes into account critical factors such as revenue growth, net income, free cash flow (FCF) compound annual growth rate (CAGR), the trend of shares outstanding, and the debt-to-FCF ratio. This helps investors to make a more informed decision, as an undervalued stock might still have poor financial fundamentals.
To view the detailed SS Score for Discover Financial Services, Login or Upgrade for access.
The Price to Free Cash Flow (P/FCF) ratio for Discover Financial Services is 5.96, offering insights into how much investors are paying for the company's free cash flow. A lower P/FCF ratio typically suggests that the stock is undervalued, while a higher ratio may indicate overvaluation.
In summary, Discover Financial Services (DFS) has shown consistent financial performance, as illustrated by the financial charts above, which track its revenue growth, net income, free cash flow, and shares outstanding over the past several years. These metrics provide investors with key insights into the company's past and projected future performance. Investors should use the SS Score alongside the DCF Fair Value to make better-informed decisions about whether to buy or hold the stock.
*This analysis is for informational purposes only and does not constitute investment advice. Always read the company's 10-K filings and do your own research before making any investment decisions.
Whether Discover Financial Services (DFS) is a good stock to buy depends on various factors, including its financial health, market conditions, and your investment strategy. Our analysis indicates that the stock may be overvalued compared to its intrinsic value. However, it is important to assess the SS Score and review the company's fundamentals before making any investment decisions.
The fair value of Discover Financial Services (DFS) is determined through our Discounted Cash Flow (DCF) analysis. This value represents the intrinsic worth of the stock based on its expected future cash flows. To view the specific fair value, consider subscribing to our service for complete access.
The SS Score is a proprietary financial quality metric that assesses factors such as revenue growth, net income, free cash flow growth, and debt levels. It helps investors evaluate the overall financial health of Discover Financial Services. To access the full SS Score, consider upgrading your subscription.
Discover Financial Services is a significant player in the industry sector, with a market capitalization of $33.96B and a competitive P/E ratio of 10.7. Investors should compare these metrics with industry peers to gauge whether Discover Financial Services is outperforming or underperforming within its sector.
Capital One will be even more focused on credit-card lending now that it has completed the Discover deal.
Fifteen months after it was announced, Capital One's $35 billion acquisition of Discover is official. The deal, finalized Sunday (May 18), creates the largest credit card issuer in terms of loan volum...
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RIVERWOODS, Ill.--(BUSINESS WIRE)--More than four in five Americans (84%) are interested in improving their financial situation, but two in five (41%) are unsure about how to best manage their persona...
Democratic lawmakers want the Federal Reserve to reconsider its approval of Capital One's purchase of Discover. In a letter to the central bank Friday (May 2), Rep.
I initiate coverage on Capital One with a Strong Buy rating and a $222.92 price target, driven by underappreciated earnings accretion and network synergies from the Discover integration. My forecast f...
Discover Financial Services posted first-quarter earnings results Thursday (April 24) that showed improving credit metrics, increased debit spending and higher deposits, ahead of its pending acquisiti...
Discover Financial Services (NYSE:DFS) Q1 2025 Earnings Conference Call April 24, 2025 8:00 AM ET Company Participants Erin Stieber - Investor Relations Michael Shepherd - Director, Interim Chief Exe...
Positive credit trends contributed to “solid first quarter financial performance” at Discover Financial Services, Discover Interim CEO and President Michael Shepherd said in a Wednesday (April 23) ear...
U.S. credit card issuer Discover Financial reported a 30% rise in first-quarter profit on Wednesday, helped by a drop in the company's provision for credit losses and higher interest income.
RIVERWOODS, Ill.--(BUSINESS WIRE)--Discover Financial Services (NYSE: DFS): First Quarter 2025 Results 2025 2024 YOY Change Total loans, end of period (in billions) $117.4 $126.6 (7%) Total revenue ...
With less than one month to go before its acquisition of Discover Financial Services, Capital One is on track to deliver synergies and forge an expanded consumer card and digital banking footprint in ...
Capital One recorded a higher first-quarter profit and is prepared to complete its acquisition of Discover on May 18.
Capital One's plans to acquire Discover have been approved at the federal level.
Shares were climbing after regulators approved a merger between two of the biggest U.S. credit-card issuers.
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The pending merger between Capital One and Discover Financial services received approval from several regulators Friday, bringing the $35 billion tie-up closer to completion.
Capital One and Discover Financial Services said Friday (April 18) that they have received all required regulatory approvals to complete Capital One's proposed acquisition of Discover.
Federal regulators approved Capital One's (COF) bid to become America's largest credit card lender, signing off on the company's purchase of Discover (DFS) on Friday.
The deal joins two of the largest credit card companies that aren't banks first, like JPMorgan and Citi, with the notable exception of American Express.
Acquisition expected to be completed on 18 May after Federal Reserve and currency comptroller sign off on deal
The Federal Deposit Insurance Corp. (FDIC) and the Federal Reserve Board fined Discover Financial Services and two subsidiaries, Discover Bank and DFS Services LLC, alleging that they misclassified co...
Below estimates were sourced from SimplyWallSt and are intended for educational purposes only as a baseline for the analysis.
Year | FCF Estimate | % | # Analysts |
---|---|---|---|
2025 | 3.27B | Analyst x1 | |
2026 | 4.01B | 22.47% | Analyst x1 |
2027 | 3.30B | -17.53% | Est @-17.5% |
2028 | 2.92B | -11.61% | Est @-11.6% |
2029 | 2.72B | -7.00% | Est @-7.0% |
2030 | 2.60B | -4.28% | Est @-4.3% |
2031 | 2.54B | -2.38% | Est @-2.4% |
2032 | 2.51B | -1.04% | Est @-1.0% |
2033 | 2.51B | -0.11% | Est @-0.1% |
2034 | 2.52B | 0.50% | Est @0.5% |
Below are the FCF estimates with the discount factor and the calculated present value with the terminal value that led the results above.
Year | FCF | Discount Factor | PV of Future FCF |
---|---|---|---|
2023A | 8.26B | 1.00 | 8.26B |
2024A | 8.16B | 1.00 | 8.16B |
2025E | 3.27B | 1.11 | 2.94B |
2026E | 4.01B | 1.23 | 3.25B |
2027E | 3.30B | 1.37 | 2.41B |
2028E | 2.92B | 1.52 | 1.92B |
2029E | 2.72B | 1.69 | 1.61B |
2030E | 2.60B | 1.88 | 1.38B |
2031E | 2.54B | 2.09 | 1.22B |
2032E | 2.51B | 2.32 | 1.08B |
2033E | 2.51B | 2.57 | 974.42M |
2034E | 2.52B | 2.86 | 881.66M |
Terminal | 30.13B | 2.86 | 10.54B |
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