Discover Financial Services

WBAG:DFS Stock Report

Market Cap: €43.0b

Discover Financial Services Valuation

Is DFS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of DFS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DFS (€174.38) is trading below our estimate of fair value (€246.19)

Significantly Below Fair Value: DFS is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DFS?

Key metric: As DFS is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for DFS. This is calculated by dividing DFS's market cap by their current earnings.
What is DFS's PE Ratio?
PE Ratio14.5x
EarningsUS$3.11b
Market CapUS$45.01b

Price to Earnings Ratio vs Peers

How does DFS's PE Ratio compare to its peers?

The above table shows the PE ratio for DFS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average17.1x
SYF Synchrony Financial
8.4x-8.3%US$25.7b
COF Capital One Financial
18x15.4%US$71.4b
BAJFINANCE Bajaj Finance
26.6x22.9%₹4.1t
ALLY Ally Financial
15.3x28.4%US$11.5b
DFS Discover Financial Services
14.5x3.8%€45.0b

Price-To-Earnings vs Peers: DFS is good value based on its Price-To-Earnings Ratio (14.5x) compared to the peer average (16.9x).

Price to Earnings Ratio vs Industry

How does DFS's PE Ratio compare vs other companies in the European Consumer Finance Industry?

1 CompanyPrice / EarningsEstimated GrowthMarket Cap
DFS 14.5xIndustry Avg. 9.0xNo. of Companies4PE0612182430+
1 CompanyEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: DFS is expensive based on its Price-To-Earnings Ratio (14.5x) compared to the European Consumer Finance industry average (9.2x).

Price to Earnings Ratio vs Fair Ratio

What is DFS's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DFS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio14.5x
Fair PE Ration/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate DFS's Price-To-Earnings Fair Ratio for valuation analysis.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst DFS forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€174.38
€156.21
-10.4%
10.5%€185.34€129.64n/a12
Nov ’25€138.50
€145.12
+4.8%
7.3%€159.99€124.85n/a12
Oct ’25€124.34
€136.64
+9.9%
7.1%€153.58€121.96n/a12
Sep ’25€124.00
€139.06
+12.1%
6.8%€157.25€124.88n/a12
Aug ’25€127.64
€139.06
+8.9%
6.8%€157.25€124.88n/a12
Jul ’25€123.82
€126.97
+2.5%
7.5%€140.90€107.31n/a13
Jun ’25€111.52
€125.28
+12.3%
7.5%€138.94€105.81n/a13
May ’25€118.88
€127.45
+7.2%
7.6%€141.74€107.95n/a13
Apr ’25€121.05
€116.67
-3.6%
12.7%€133.78€95.95n/a13
Mar ’25€111.75
€116.33
+4.1%
14.1%€155.03€95.97n/a16
Feb ’25€96.84
€107.60
+11.1%
8.8%€129.72€95.68n/a21
Jan ’25€101.85
€102.65
+0.8%
14.4%€138.99€80.47n/a21
Dec ’24€86.74
€97.10
+11.9%
15.7%€139.66€80.85n/a21
Nov ’24€77.76
€99.75
+28.3%
15.8%€143.62€85.04€138.5020
Oct ’24€82.68
€108.69
+31.5%
13.6%€143.78€85.13€124.3418
Sep ’24€85.02
€107.05
+25.9%
13.6%€140.65€83.28€124.0018
Aug ’24€94.96
€107.94
+13.7%
10.8%€131.24€88.99€127.6417
Jul ’24€107.15
€110.06
+2.7%
9.7%€133.77€92.54€123.8216
Jun ’24€97.94
€110.44
+12.8%
9.3%€136.10€94.15€111.5217
May ’24€92.00
€107.21
+16.5%
9.1%€132.90€91.94€118.8818
Apr ’24€91.12
€109.45
+20.1%
8.4%€134.60€94.96€121.0518
Mar ’24€105.86
€110.21
+4.1%
7.9%€136.17€97.00€111.7518
Feb ’24€106.58
€107.68
+1.0%
8.6%€134.17€89.14€96.8418
Jan ’24€91.17
€113.89
+24.9%
9.6%€137.74€91.51€101.8518
Dec ’23€101.60
€113.84
+12.0%
9.4%€138.70€97.85€86.7418
Nov ’23€106.34
€120.42
+13.2%
8.9%€143.76€104.28€77.7617

Analyst Forecast: Target price is lower than the current share price.

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