Discover Financial Services

NYSE:DFS Stock Report

Market Cap: US$44.2b

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 ($173.22) is trading below our estimate of fair value ($235.53)

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 Ratio14.2x
EarningsUS$3.11b
Market CapUS$44.21b

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 Average12.5x
SYF Synchrony Financial
8x-8.4%US$25.3b
COF Capital One Financial
17.2x15.2%US$70.6b
ALLY Ally Financial
14.2x28.4%US$11.0b
KSPI Kaspi.kz
10.7x23.7%US$20.9b
DFS Discover Financial Services
14x3.8%US$44.2b

Price-To-Earnings vs Peers: DFS is expensive based on its Price-To-Earnings Ratio (14x) compared to the peer average (12.5x).

Price to Earnings Ratio vs Industry

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

2 CompaniesPrice / EarningsEstimated GrowthMarket Cap
YRD Yiren Digital
1.8xn/aUS$507.70m
XYF X Financial
1.7xn/aUS$302.56m
No more companies available in this PE range
DFS 14.2xIndustry Avg. 12.3xNo. of Companies4PE0816243240+
2 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: DFS is expensive based on its Price-To-Earnings Ratio (14x) compared to the US Consumer Finance industry average (12.3x).

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 Ratio14.2x
Fair PE Ratio19.7x

Price-To-Earnings vs Fair Ratio: DFS is good value based on its Price-To-Earnings Ratio (14x) compared to the estimated Fair Price-To-Earnings Ratio (19.7x).

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
CurrentUS$173.22
US$162.67
-6.1%
10.5%US$193.00US$135.00n/a12
Nov ’25US$151.30
US$156.92
+3.7%
7.3%US$173.00US$135.00n/a12
Oct ’25US$136.40
US$151.25
+10.9%
7.1%US$170.00US$135.00n/a12
Sep ’25US$138.71
US$150.33
+8.4%
6.8%US$170.00US$135.00n/a12
Aug ’25US$136.17
US$150.33
+10.4%
6.8%US$170.00US$135.00n/a12
Jul ’25US$132.95
US$136.08
+2.4%
7.5%US$151.00US$115.00n/a13
Jun ’25US$122.66
US$136.15
+11.0%
7.5%US$151.00US$115.00n/a13
May ’25US$123.58
US$135.77
+9.9%
7.6%US$151.00US$115.00n/a13
Apr ’25US$129.38
US$126.46
-2.3%
12.7%US$145.00US$104.00n/a13
Mar ’25US$120.81
US$126.06
+4.3%
14.1%US$168.00US$104.00n/a16
Feb ’25US$106.56
US$116.95
+9.8%
8.8%US$141.00US$104.00n/a21
Jan ’25US$112.40
US$112.26
-0.1%
14.4%US$152.00US$88.00n/a21
Dec ’24US$95.62
US$105.69
+10.5%
15.7%US$152.00US$88.00n/a21
Nov ’24US$82.59
US$105.57
+27.8%
15.8%US$152.00US$90.00US$151.3020
Oct ’24US$86.63
US$114.91
+32.6%
13.6%US$152.00US$90.00US$136.4018
Sep ’24US$92.06
US$115.69
+25.7%
13.6%US$152.00US$90.00US$138.7118
Aug ’24US$104.82
US$120.08
+14.6%
10.8%US$146.00US$99.00US$136.1717
Jul ’24US$116.85
US$120.13
+2.8%
9.7%US$146.00US$101.00US$132.9516
Jun ’24US$105.33
US$118.47
+12.5%
9.3%US$146.00US$101.00US$122.6617
May ’24US$99.61
US$117.78
+18.2%
9.1%US$146.00US$101.00US$123.5818
Apr ’24US$98.84
US$118.72
+20.1%
8.4%US$146.00US$103.00US$129.3818
Mar ’24US$112.94
US$118.17
+4.6%
7.9%US$146.00US$104.00US$120.8118
Feb ’24US$115.83
US$117.17
+1.2%
8.6%US$146.00US$97.00US$106.5618
Jan ’24US$97.83
US$120.72
+23.4%
9.6%US$146.00US$97.00US$112.4018
Dec ’23US$106.53
US$119.83
+12.5%
9.4%US$146.00US$103.00US$95.6218
Nov ’23US$103.89
US$118.94
+14.5%
8.9%US$142.00US$103.00US$82.5917

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

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