Discover Financial
Credit card issuer Discover Financial Services (NYSE: DFS) has seen its share price sink by nearly 20% over the past 12 months. The stock posted its 52-week low last week, and the 52-week high was posted exactly one year ago. Based on the price/EPS multiple, shares may be oversold. Unfortunately, high inflation and a threatened recession outweigh rising rates. Adjusted EBIT fell by 15.1% year over year in the June quarter, while earnings were down by nearly 29%. If Discover can turn that around, investors may get interested in the stock again.
Analysts are somewhat bullish on the stock, with 12 of 21 having a Buy or Strong Buy rating and the rest rating the shares at Hold. At a share price of around $92.80, the upside potential based on a median price target of $112.50 is about 21.2%. At the high price target of $142.00, the upside potential is 53%.
Third-quarter revenue is forecast to reach $3.4 billion, up 5.4% sequentially and by 22.3% year over year. Adjusted EPS are forecast at $3.72, down 6.o% sequentially but up 5.1% year over year. For the full year, EPS is estimated to reach $15.59, down 126.%, on revenue of $13.02 billion, up 7.7%.
Discover stock trades at about 5.9 times expected 2022 EPS, 6.7 times estimated 2023 earnings of $13.76 and 6.7 times estimated 2024 earnings of $13.94. The stock’s 52-week range is $87.64 to $133.38. Discover pays an annual dividend of $2.40 (yield of 2.59%). Total shareholder return over the past year was negative 28.9%.
Range Resources
Independent oil and gas producer Range Resources Corp. (NYSE: RRC) has posted a 12-month share price increase of nearly 52%. But that is down by more than 25% since the company posted a 52-week in early June.
Last week the company said that it expects to report a cash loss on its hedges of $457,708. That’s sort of good news because it implies that its realized prices were higher than its hedged price. The average price of natural gas doubled from $1.18 in the June quarter of 2021 to $2.78 in the June 2022 quarter, and oil and natural gas liquids prices rose by 40% and 100%, respectively, over the same period. On a natural gas-equivalent basis, average prices rose from $1.48 to $1.74 per thousand cubic feet equivalent.
As a group, analysts are cautious. Of 24 brokerages covering the stock, 14 have a Hold rating and eight have a Buy or Strong Buy rating. At a share price of around $27.05, the stock’s upside potential based on a median price target of $38.00 is 40.5%. At the high price target of $57.00, the upside potential is 110.7%.
For the third quarter, Range Resources is expected to report revenue of $1.07 billion, down 12.5% sequentially and about 254% year over year. Adjusted EPS are forecast at $1.40, up 10.3% sequentially and 54.2% year over year. For the full 2022 fiscal year, analysts are looking for EPS of $5.33, up almost 164%, and revenue of $3.86 billion, up 31.8%.
Range Resources stock trades at about 5.1 times expected 2022 EPS, 5.1 times estimated 2023 earnings of $5.29 and 4.9 times estimated 2024 earnings of $5.50 per share. The stock’s 52-week range is $16.71 to $37.44, and the company pays a dividend of $0.32 (yield of 1.18%). Total shareholder return for the past 12 months was nearly 11%.
Originally posted at 24/7 Wall St.
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