Capital One Financial today
Capital One Financial
- 52 week range
- $143.22
▼
$232.45
- Dividend yield
- 1.08%
- P/E ratio
- 93.45
- Price target
- $260.00
Capital One Financial Company New York Stock Exchange: COF It left no room for doubt for investors who may have been sitting on the fence.
The company delivered an excellent earnings report. Based on the stock price and analysts’ reaction immediately after the report, now is a good time to buy shares of the financial services company.
COF stock rose 3.39% during midday trading following the earnings news, approaching its all-time high. While this may seem like a cautious move for investors, for Capital One, this is likely just the beginning.
Capital One checked all the boxes
Capital One completed Merger with Discover Financial in May, making this the first fully comprehensive earnings report since the merger. It is fair to say that the impact has been positive.
Revenue of $15.36 billion exceeded expectations of $15.06 billion and was 23% higher than the prior quarter. Adjusted earnings per share (EPS) of $5.95 beat estimates of $4.25 and were 8.5% higher than the prior-year quarter. The company’s net interest margin also increased to 8.36%. That was up about 75 basis points, of which about 45 basis points came from Discover.
However, as this earnings season approaches, questions surrounding financial stocks, especially those that offer credit, have focused on two things: What is their allowance for credit losses, and has their net discount ratio been rising or falling? Capital One was particularly interested in these questions because of the data from Discover.
It turns out it wasn’t a big deal. Capital One reported:
- A lower-than-expected provision for credit losses of $2.71 billion, although higher than the $2.48 billion recorded in the same quarter last year.
- The net fee ratio decreased to 3.16%, compared to 3.27% in the same quarter of last year.
Buybacks and increased dividends are bullish for shareholders
Shareholders got more good news when Capital One announced a new $16 billion stock buyback program starting immediately. The buyback amounts to approximately 12% of the company’s current market cap and replaces the one it issued in April 2022.
The company also announced a 33% increase in its quarterly dividend from 60 cents per share to 80 cents, which will begin with the next dividend.
COF Stock has a bullish setup to new highs
COF stock is trading near the top of its Bollinger Band and its Relative Strength Index (RSI) is around 58 (not shown). This setup is fairly bullish without being overbought.
The company’s stock showed a pattern in which price action at the upper band led to a pullback or consolidation. However, these declines tended to be modest, rather than sharp, corrections.
Capital One Financial stock forecasts today
$260.00
17.39% upModerate purchase
Based on 24 analyst ratings
| Current price | $221.48 |
|---|---|
| High expectations | $290.00 |
| Average expectations | $260.00 |
| Low expectations | $224.00 |
Capital One Stock Outlook Details
This could be the case here as the MACD shows a minimal breakaway after a bullish crossover.
Investors will want to look for signs of continued strong momentum following this post-earnings bullish move, most likely engineered by high-speed trading.
Even if there is a pullback, the stock is unlikely to fall to the $202 level, which has served as support on two separate occasions over the last 30 days.
Investors may want to look at an area around $214. Analysts were quick to intervene.
Capital One analyst forecasts on MarketBeat show five analysts raising their price targets, with one analyst reiterating his target. In all but one case, the targets are higher than the agreed-upon price of $258.89.
Before you consider Capital One Financial, you’ll want to hear this.
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