Zacks Investment Ideas feature highlights Discover Financial and American Express

For Immediate ReleaseChicago, IL – January 22, 2025 – Today, Zacks Investment Ideas feature highlights Discover Financial Services DFS and American Express AXP.Are These Finance Titans a Buy Heading into Earnings?The 2024 Q4 earnings season has entered full swing, with this week’s reporting docket stacked with many notable companies. Two financial giants, Discover Financial Services and American Express, are among the bunch.See the ZacksEarnings Calendar to stay ahead of market-making news. Both stocks have been big-time outperformers over the last year relative to the S&P 500.The big banks already helped kick off the Q4 cycle for the broader finance sector on a positive note, with their results generally reassuring. But how do things stack up for DFS and AXP? Let’s take a closer look.DFS' EPS Expected to DoubleAnalysts have shown bullishness for Discover’s quarter to be reported, with the $3.15 per share expected up 14% over the last several months and suggesting sizable growth of 100% year-over-year. Positive revisions really rolled in following the robust jobs report a bit earlier in January, brightening the outlook significantly.A critical metric for investors to keep an eye on in Discover’s release is net interest income, a primary driver of profitability given its core business practices. It overall provides a nice big-picture view of how it has managed its interest-earning assets.For the quarter, the Zacks Consensus estimate for net interest income stands at $3.6 billion, 3% higher than the year-ago mark of $3.4 billion.The valuation picture here isn’t rich compared to the general market heading into the release, with the current 14.5X forward 12-month earnings multiple currently reflecting a 35% discount relative to the S&P 500.The PEG ratio also works out to 1.1X, reflecting that investors are paying a fair price for the forecasted growth. The stock sports a Style Score of ‘B’ for Value.Overall, shares have been big-time performers over the last year, and the market-beating price action looks set to continue given the company reports strong net interest income and provides favorable commentary surrounding the consumer.AXP Keeps Reporting Record SalesAnalysts have also been similarly positive for AXP concerning EPS expectations, with the $3.03 Zacks Consensus EPS estimate up 3% over recent months and suggesting 15% year-over-year growth.Just like DFS, net interest income will be a critical metric to watch in the release for the same reasons. For the period, the Zacks Consensus estimate for net interest income stands at $4.1 billion, a notable 15% jump from the year-ago period.American Express has similarly positively surprised on the metric over recent periods, falling short just once in the past six.It’s worth noting here that AXP’s top line has shown great strength, with Q3 sales of $16.6 billion in its latest release reflecting the 10th consecutive period of record sales. Forecasted Q4 sales of $17.2 billion would reflect 8.8% year-over-year growth, an acceleration relative to the prior period.Card fee revenue growth and continued customer acquisitions have helped drive the broader top line growth, which led the company to raise its FY24 EPS outlook following the above-mentioned release. Like DFS, shares stand to see continued positivity given it provides strong net interest income results and keeps scooping up new card members.Bottom LineWith the 2024 Q4 earnings season really kicking into a high gear this week, we’ve got a slate full of notable companies on the docket, a list that includes AmEx and Discover.Given their similarities, it’s reasonable to expect a shared reaction among shares, with DFS going first on January 22nd while AXP reports on the 24th. Both stocks have been big time outperformers over the last year, and the bullishness looks set to continue given we get favorable net interest income and broader consumer strength commentary.Still, the big banks’ results went a long way in reassuring the broader finance sector, a key development to keep in mind.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Discover Financial Services (DFS): Free Stock Analysis Report American Express Company (AXP): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks