Is A Beat In Store For Discover Financial (DFS) Q2 Earnings?
Zacks Investment Research | Jul 18, 2019 10:23PM ET
Discover Financial Services (NYSE:DFS) will release second-quarter 2019 results on Jul 23 after market close. In the last reported quarter, the company’s earnings of $2.15 per share beat the Zacks Consensus Estimate by 7.5%. Moreover, the bottom line improved 18.1% year over year on higher revenues and increased loans.
Let’s see, how things are shaping up prior to this announcement.
The company’s performance is likely to be boosted by higher card sales leading to solid revenues. The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at $2.12, up 11% from the year-ago reported figure.
Revenues are expected to be cushioned by improved card sales, better net interest income and other total income of the company. The Zacks Consensus Estimate for revenues stands at $2.79 billion, indicating 7.5% growth from the prior-year reported number.
Discover Financial put in consistent efforts via alliances to drive its card portfolio. The network transaction volume is likely to have contributed to the company’s performance as well.
Its Direct Banking Business, aided by loan growth and net interest margin expansion, is expected to bolster the company’s overall performance.
The company’s probable steady capital deployment during the to-be-reported quarter should further favor its bottom line.
Discover Financial continued with regular investments in fueling overall growth and adding capabilities. However, investments in technology and growth initiatives might induce a rise in overall expenses, thereby compressing margins.
The company’s overdependence on debt might persistently weigh down the margins. Moreover, the second quarter of 2019 is likely to have incurred elevated interest expenses.
What the Quantitative Model States
Our proven model conclusively shows that Discover Financial is likely to beat on earnings this to-be-reported quarter. This is because the stock needs to have the right combination of a positive Zacks Investment Research
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