Capital One Financial Corporation (NYSE:COF) is one of the 14 Best Large Cap Stocks to Invest In Now. On December 15, BofA Securities increased its price target for Capital One Financial Corporation (NYSE:COF) from $248 to $268 and kept its Buy rating.
This update came after the company’s November credit metrics, which showed strong credit performance despite card loan growth being weaker than the historical average. BofA pointed out that sequential end-of-period domestic card balances grew 127 basis points compared to the previous month. This was much lower than the usual 300 basis points growth typically seen in this period.
Previously, on December 8, Wolfe Research initiated coverage of Capital One Financial Corporation (NYSE:COF) with an Outperform rating and a price target of $270. The research firm highlighted many key reasons for its positive outlook. These include expected gains in Return on Tangible Common Equity (ROTCE), a positive Net Interest Margin (NIM) trajectory, potential for capital returns, and embedded optionality around the Discover Financial Services network.
Wolfe Research expects that Capital One Financial Corporation’s (NYSE:COF) improving earnings power and returns in the low 20% range can justify a 10.5x valuation multiple, which is slightly above the company’s historical levels.
The research firm also noted that Capital One Financial Corporation (NYSE:COF) has “ample optionality relative to peers” with more than 300 basis points of excess capital. Wolfe Research projects the CET1 ratio at about 12% by the end of 2027, which is above the company’s new 11% target. This indicates that there is room for more capital returns.
Capital One Financial Corporation (NYSE:COF) is an American financial holding company that offers a wide range of financial products and services to consumers, small businesses, and commercial clients through various channels.
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Disclosure: None. This article is originally published at Insider Monkey.
