Earnings Preview: Discover (DFS) Q1 Earnings Expected to Decline

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Discover (DFS) despite higher revenues, with the upcoming earnings report on April 17, 2024, being crucial for stock price movement based on actual results compared to estimates [1] Group 1: Earnings Estimates - Discover is expected to report quarterly earnings of $2.96 per share, reflecting a year-over-year decrease of 17.3% [2] - Revenue projections stand at $4.06 billion, indicating an increase of 8.1% from the previous year [2] - The consensus EPS estimate has been revised 1.55% higher in the last 30 days, suggesting a reassessment by analysts [2] Group 2: Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Discover is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.35%, which suggests a bearish outlook [5] - The stock currently holds a Zacks Rank of 3, making it challenging to predict an earnings beat conclusively [6] Group 3: Historical Performance - In the last reported quarter, Discover was expected to post earnings of $2.50 per share but only achieved $1.54, resulting in a surprise of -38.40% [7] - The company has not surpassed consensus EPS estimates in any of the last four quarters, indicating a trend of underperformance [7] Group 4: Market Reactions - An earnings beat or miss alone may not dictate stock price movements, as other factors can influence investor sentiment [8] - Discover does not currently appear to be a strong candidate for an earnings beat, suggesting that investors should consider additional factors before making investment decisions [8]