Discover Financial Services (DFS), based in Riverwoods, Illinois, provides digital banking products and services, and payment services in the United States. With a market cap of $50.3 billion, the company operates in two segments, Digital Banking and Payment Services.

DFS shares have outpaced the broader market over the past year, surging 60.3% compared to the S&P 500 Index’s ($SPX) 9.8% surge. Moreover, in 2025, the stock has climbed 15.5%, outpacing the SPX’s marginal decline.

Focusing on its industry benchmark, the Financial Select Sector SPDR Fund (XLF) has risen 19.2% over the past year and 4.1% this year, trailing DFS’ double-digit gains.

DFS stock grew 3.7% following the release of its Q1 earnings on Apr. 23. The company’s revenues climbed 2% year-over-year to $4.3 billion and beat the consensus mark. Moreover, its net income climbed 30% year over year to $1.1 billion. DFS’ adjusted earnings for the quarter grew 31% year-over-year to $4.25 and surpassed the Street’s estimates by 28.8%.

For the current year ending in December, analysts expect DFS’ EPS to decline 18.6% to $14.42 on a diluted basis. The company’s earnings surprise history is solid. It surpassed the consensus estimate in each of the last four quarters.

Among the 16 analysts covering DFS stock, the consensus is a “Moderate Buy.” That’s based on six “Strong Buy” ratings, one “Moderate Buy,” and nine “Holds.” 

The configuration has remained unchanged in recent months.

On May 7, Jefferies Financial Group Inc. (JEF) analyst John Hecht downgraded DFS stock from a previous "Buy" rating to a "Hold" rating and set the new price target at $180.

The mean price target of $198.64 currently sits below DFS’ current price levels. Moreover, the Street-high target of $239 suggests an impressive upside potential of 19.5%.