15 Best and Cheap Stocks to Buy According to Billionaires

Page 12 of 14

3. Discover Financial Services (NYSE:DFS)

Forward P/E Ratio: 11.34

No. of Billionaire Investors: 21

Discover Financial Services (NYSE:DFS) provides a wide range of digital banking and payment services across the U.S. Its offerings include Discover-branded credit cards, personal & home loans, and deposit products. The company operates the PULSE (ATM and debit network) and Diners Club (global charge card network) payment networks. DFS is set to merge with Capital One Financial Corporation, pending regulatory approval.

On January 27, Brian Foran from Truist upgraded the price target on DFS shares from $233 to $262, keeping a Buy rating on the stock. Foran’s upgrade follows the Q4 2024 earnings of $5.11, which exceeded analyst estimates of $3.20 per share. Discover Financial Services (NYSE:DFS) posted a revenue of $4.76 billion during the quarter, beating the estimates of $4.41 billion. The analyst’s increased price target reflects an improved earnings outlook based on a higher net interest margin path, improving credit, and a deceleration in expenses.

Middle Coast Investing stated the following regarding Discover Financial Services (NYSE:DFS) in its Q3 2024 investor letter:

“The good transitions tend to tie back to the macroeconomy. Financial companies are seen as the big winners in a soft landing. Each of our winners has good things happening to them, too. Discover Financial Services (NYSE:DFS) is cleaning up many of its problems from the past few years. Whether or not its deal with Capital One goes through, Discover’s business has gotten much stronger in the past six months.”

Page 12 of 14