Shares of Discover Financial Services
DFS,
on Thursday were on pace for their lowest close since early 2021 after the credit-card company’s efforts to set aside more money during the third quarter to cover loan losses spooked investors. The stock was down 7.5% early Thursday afternoon, trading at $84.88, putting it on track for its lowest closing price since February 1, 2021, when it closed at $82.19. Discover, in its third-quarter earnings release on Wednesday, reported a provision for credit losses of $1.7 billion, a $929 million increase from the prior year, driven by a $297 million higher reserve build and a higher net charge-off rate, a gauge of debt unlikely to be repaid. Chief Financial Officer John Greene, during Discover’s earnings call on Thursday, said the company was seeing “some indications of stress” in the economy, adding that household net worth and savings “have deteriorated.”
