Digital banking and payment services company Discover Financial Services (NYSE: DFS) recently announced that it has entered into a strategic agreement with the National Bank of Serbia to increase its footprint in the region.
Following the news, shares of the company declined more than 3% to close at $123.65 in the extended trading session on Tuesday.
Strategic Impact
The agreement will allow the cardholders of Discover, Diners Club International, PULSE and Network Alliance to use their cards on the DinaCard payment network, which includes 111,000 POS terminals, e-commerce platforms and more than 3,000 ATMs across Serbia.
Further, customers in the DinaCard network will get more payment options available in the country.
Management Commentary
The Vice-President of International Markets at Discover Global Network, Matt Sloan, said, “Building on our strong partnership the National Bank of Serbia complements Discover’s strategy of creating worldwide alliances that provide consumers with more choices when it comes to how and where they pay.”
Price Target
Recently, Deutsche Bank analyst Meng Jiao reiterated a Hold rating on the stock. The analyst, however, raised the price target from $134 to $140, which implies upside potential of 13.2% from current levels.
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 5 Buys and 7 Holds. The average Discover price target of $138.92 implies that the stock has upside potential of 12.3% from current levels. Shares have gained about 24.9% over the past year.
Positive News Sentiment
News Sentiment for DFS is Very Positive based on 13 articles over the past seven days. 100% of the articles have Bullish sentiment, compared to a sector average of 56%.
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