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Q1 Earnings Preview: American Express and Discover Financial
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Earnings season kicked off last week, with several big banks starting the party. Many posted better-than-expected results, exceeding both earnings and revenue expectations.
And now, we’ll remain busy sorting through quarterly results daily, as we’re just starting the 2023 Q1 season.
This week, several big-time names in the Zacks Finance sector, Discover Financial Services (DFS - Free Report) and American Express (AXP - Free Report) , will deliver their quarterly results. Below is a chart illustrating the year-to-date performance of both stocks, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
As we can see, both stocks reside in the green year-to-date, with AXP shares nicely outperforming the general market in 2023. Let’s take a closer look at how each company stacks up heading into earnings.
Discover Financial Services
Analysts have primarily had an optimistic view of Discover’s upcoming release, with three positive earnings estimate revisions hitting the tape over the last 60 days. The Zacks Consensus EPS Estimate of $3.92 suggests a 7% pullback year-over-year within earnings.
Image Source: Zacks Investment Research
In addition, our consensus revenue estimate stands at $3.7 billion, implying growth of a solid 26% year-over-year. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Shutterstock
The company’s net interest income will be a metric widely watched, an area that DFS has consistently positively surprised on as of late. For the quarter, the Zacks Consensus Estimate for Net Interest Income sits at $3.1 billion, implying growth of 22% year-over-year.
Image Source: Zacks Investment Research
The company’s shares aren’t stretched in terms of valuation, further reflected by its Style Score of “A” for value. DFS shares presently trade at a 7.5X forward earnings multiple, beneath the 8.8X five-year median and the Zacks Finance sector average.
Image Source: Zacks Investment Research
American Express
Like DFS, analysts have primarily had an optimistic view of American Express’ upcoming release, with three positive earnings estimate revisions rolling in over the last 60 days. The Zacks Consensus EPS Estimate of $2.70 implies a modest 1% Y/Y pullback within earnings.
Image Source: Zacks Investment Research
American Express is forecasted to have generated roughly $14 billion in quarterly revenue, reflecting a solid 19% year-over-year positive change.
Image Source: Zacks Investment Research
Like DFS, investors will likely closely monitor the company’s net interest income; for the quarter, the Zacks Consensus Estimate for Discover’s Net Interest Income resides at $2.8 billion, suggesting an uptick of nearly 30% from the year-ago quarter.
The company has regularly positively surprised on this metric, as illustrated below.
Image Source: Zacks Investment Research
AXP’s 14.5X forward earnings multiple resides above the Zacks sector average but sits nicely beneath the 15.5X five-year median. American Express carries a Style Score of “B” for Value.
Image Source: Zacks Investment Research
Bottom Line
With earnings season kicking into higher gear, investors can expect a surplus of quarterly results daily. We’ve already received results from the big banks, with many posting better-than-expected results.
And this week, we’ll hear from Discover Financial Services (DFS - Free Report) and American Express (AXP - Free Report) . DFS is scheduled to reveal its quarterly results on April 19th after the market close, whereas AXP will report on April 20th before market open.
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Q1 Earnings Preview: American Express and Discover Financial
Earnings season kicked off last week, with several big banks starting the party. Many posted better-than-expected results, exceeding both earnings and revenue expectations.
And now, we’ll remain busy sorting through quarterly results daily, as we’re just starting the 2023 Q1 season.
This week, several big-time names in the Zacks Finance sector, Discover Financial Services (DFS - Free Report) and American Express (AXP - Free Report) , will deliver their quarterly results. Below is a chart illustrating the year-to-date performance of both stocks, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
As we can see, both stocks reside in the green year-to-date, with AXP shares nicely outperforming the general market in 2023. Let’s take a closer look at how each company stacks up heading into earnings.
Discover Financial Services
Analysts have primarily had an optimistic view of Discover’s upcoming release, with three positive earnings estimate revisions hitting the tape over the last 60 days. The Zacks Consensus EPS Estimate of $3.92 suggests a 7% pullback year-over-year within earnings.
Image Source: Zacks Investment Research
In addition, our consensus revenue estimate stands at $3.7 billion, implying growth of a solid 26% year-over-year. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Shutterstock
The company’s net interest income will be a metric widely watched, an area that DFS has consistently positively surprised on as of late. For the quarter, the Zacks Consensus Estimate for Net Interest Income sits at $3.1 billion, implying growth of 22% year-over-year.
Image Source: Zacks Investment Research
The company’s shares aren’t stretched in terms of valuation, further reflected by its Style Score of “A” for value. DFS shares presently trade at a 7.5X forward earnings multiple, beneath the 8.8X five-year median and the Zacks Finance sector average.
Image Source: Zacks Investment Research
American Express
Like DFS, analysts have primarily had an optimistic view of American Express’ upcoming release, with three positive earnings estimate revisions rolling in over the last 60 days. The Zacks Consensus EPS Estimate of $2.70 implies a modest 1% Y/Y pullback within earnings.
American Express is forecasted to have generated roughly $14 billion in quarterly revenue, reflecting a solid 19% year-over-year positive change.
Image Source: Zacks Investment Research
Like DFS, investors will likely closely monitor the company’s net interest income; for the quarter, the Zacks Consensus Estimate for Discover’s Net Interest Income resides at $2.8 billion, suggesting an uptick of nearly 30% from the year-ago quarter.
The company has regularly positively surprised on this metric, as illustrated below.
Image Source: Zacks Investment Research
AXP’s 14.5X forward earnings multiple resides above the Zacks sector average but sits nicely beneath the 15.5X five-year median. American Express carries a Style Score of “B” for Value.
Image Source: Zacks Investment Research
Bottom Line
With earnings season kicking into higher gear, investors can expect a surplus of quarterly results daily. We’ve already received results from the big banks, with many posting better-than-expected results.
And this week, we’ll hear from Discover Financial Services (DFS - Free Report) and American Express (AXP - Free Report) . DFS is scheduled to reveal its quarterly results on April 19th after the market close, whereas AXP will report on April 20th before market open.