Discover Financial Services

DFS: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$146.00	Wbqhlq	Vfgmbsz

Discover Delivers Impressive Revenue Growth in Q3, but Higher Credit Costs Are an Offset

Michael Miller

Oct 25, 2022

Narrow-moat-rated Discover Financial reported decent third-quarter results as strong loan growth was offset by higher credit costs. Discover’s net revenue increased 25% year over year and 7.9% sequentially to $3.48 billion. Earnings per share were flat from last year at $3.54, which translates to a return on equity of 29%. As we incorporate these results, we are maintaining our $142 fair value estimate for Discover, and we see the shares as undervalued at current prices.

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