Is Discover's Recent Guidance a Red Flag for Investors?
Discover Financial Services (NYSE: DFS) recently surprised investors with its guidance for 2023 when it said net charge-offs would move above pre-pandemic levels and exceed what Wall Street had expected. Investors were left questioning whether this was a sign that consumers were struggling and if it spelled trouble for the broader economy.
Four-out-of-five economists believe the U.S. will enter a recession within the next 24 months, so the uptick isn't too surprising. However, with the threat of a recession and a slowing economy, should investors be concerned about Discover stock? Let's take a look and find out.
Discover reported a solid fourth quarter, with net revenue up 27% year over year while diluted earnings per share grew 4%. Its results got a boost from record loan growth; credit card loans grew 21% year over year while personal loans were up 15%.
Source Fool.com
