Discover Financial Services Stock Drops After Weak Q4—Key Technical Levels to Monitor

Discover Financial Services

Shares in Discover Financial Services (DFS) were down sharply in premarket trading Thursday after the online banking and payments company’s quarterly earnings came up short of analysts’ expectations. The company also cautioned about tougher conditions facing consumers, prompting it to set aside a higher bad debt provision. Discover Financial’s bottom line came in at $388 million, or $1.54 per share in the fourth quarter compared with $1.025 billion, or $3.74 per share, in last year’s corresponding quarter. The company said its provision for credit losses, which are loans the bank thinks it won’t be able to recover, increased to $1.9 billion in the December quarter, up $1 billion from the same period last year. However, the company said its sour loan provisions were toward the low end of its expected range.

Since bottoming out early in the fourth quarter, the DFS share price has made an impulsive move higher to trade toward the top end of its 2023 range. If further selling occurs in the coming days, look for a potential area of support on the chart just below $100 where the 50-day moving average sits poised to cross above the 200-day moving average and form a bullish golden cross signal.

Discover Financial shares were down 7.2% at $100.90 about 20 minutes before the opening bell on Thursday.

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As of the date this article was written, the author does not own any of the above securities.