Here are some sample widgets you could interact with from this dashboard:
Discover Financial is slated to release its Q4 and full-year 2019 results on January 23, 2020. For FY 2019, Trefis estimates that the company will report:Revenues would increase to $11.48 billion primarily due to higher credit card loans and growth in student & personal loans. Further, it would marginally beat the consensus estimate of $11.46 billion.EPS would improve to $8.79 due to a combination of higher revenues and a steady decrease in shares outstanding. However, it would still be lower than the consensus earnings estimate of $9.07.
We believe that weaker-than-expected earnings for FY 2019 would overshadow the revenue beat, resulting in a slight negative movement in the Discover Financial's stock price once earnings are announced. Our forecast indicates that Discover Financial's valuation is $90 a share, which is roughly 5% above its current price of $84.
(1) Revenues are expected to be slightly above consensus estimates
Trefis estimates Discover Financial's 2019 revenues to be $11.48 billion, marginally above the consensus estimate of $11.46 billion
Trefis Estimate of Total Revenues
(1) Direct Banking $11.15 Bil (97%)
(2) Payment Services $0.33 Bil (3%)
TOTAL $11.48 Bil
Consensus $11.46 Bil
Surprise $0.02 Bil
(2) EPS likely to narrowly miss consensus estimates
Discover Financial's 2019 earnings per share (EPS) expected to be $8.79 per Trefis analysis, 3% lower than the consensus estimate of $9.07 per share
EPS - 2019E
Total Revenues $11.5 Bil
- Total Expenses $8.6 Bil (*)
Net Income $2.9 Bil
÷ Shares Outstanding 325 Mil
(*) - The expense figure includes preferred dividend and other minority expenses
(3) Stock price estimate ~5% higher than the market price
Trefis' forecast for Discover Financial's 2019 earnings is slightly lower than the market estimates, although P/E multiple is leading. This works out to a fair value of $90 for DFS's stock as opposed to the current market price around $84
Discover Financial's Share Price [= A x B]
EPS - 2019E [A]
Trailing P/E Multiple [B]
Details about our forecast for Discover Financial's (1) Revenues, (2) EPS, and (3) P/E Multiple follow:
(1) Revenue is expected to increase by 7.2% from $10.7 billion in 2018 to $11.5 billion in 2019
Discover Financial's Net Revenues have grown at an average annual rate of 8.5% from $9.1 billion in 2016 to $10.7 billion in 2018 and is expected to have grown at a similar pace in 2019, enabling it to cross $11.5 billion. This would primarily be driven by around a 7% increase in the Direct Banking segment due to an 8% jump in credit cards revenue and 5% growth in other loans. Further, credit card and other loan revenues are expected to improve due to higher outstanding card loans and growth in students & personal loans respectively.
Total Revenues [=A+B]
Direct Banking [A]
Payment Services [B]
What about Revenues in 2020?
See Discover Financial Revenue - How Does Discover Financial Make Money?
We provide an interactive, in-depth view of the company's revenues along with our forecasts and a comparison of trends with peers American Express, Mastercard and Visa.
Key for 2020: We expect Discover Financial's to add $1.5 billion in incremental revenues over 2019-2020, $800 million in 2019 and $700 million in 2020.
American Express vs Discover Financial: A Comparative Analysis Of Consumer Card BusinessDiscover Financial Valuation: Expensive Or Cheap?More Financial Companies Data
What about Expenses and Earnings in 2020?
Key for 2020: We believe that revenue and expenses would grow at a similar rate in 2020, enabling the net income margin figure to hover around the 2019 figure of 24.9%.
(3) A trailing P/E multiple of 10.3x looks appropriate for Discover Financial's stock, as opposed to the current implied P/E multiple of 9.3x
We use our full cash flow model for Discover Financial to arrive at a P/E multiple of 10.3x for a price estimate of $90
Note: P/E Multiples are based on Share Price at the end of the year, and reported (or expected) Adjusted Earnings for the full year
FY year for Visa is from Oct-Sep.
P/E Multiple DFS
P/E Multiple AXP
P/E Multiple MA
P/E Multiple V
Our complete set of analyses on Discover Financial
1. How to save your forecasts for Discover Financial:
Click on the blue "Try Trefis" button in the header to create an account, then navigate back to this dashboard. Now, any changes you make to these inputs will be auto-saved as a scenario (see left panel of dashboard).
2. How to monitor your scenario vs. actual results
Once you've saved your forecast, you can "rename" your scenario by clicking on the gear icon next to the scenario (on the left panel). For more info, see this quick, 30-sec video (look at the 9 sec mark)
With your forecast saved and named, you can compare your forecasts to hundreds of other Trefis users who came up with their own forecasts. Lastly, you can share with friends and colleagues to show them how you fared and compare your forecasts to theirs.