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Valued at a market cap of $75.7 billion, Capital One Financial Corporation (COF) is a financial services holding company that provides various financial products and services to consumers, small businesses and commercial clients. The McLean, Virginia-based company is one of the largest credit card issuers in the U.S. and a major player in digital banking.
This financial services provider has considerably outpaced the broader market over the past 52 weeks. Shares of COF have soared 36.8% over this time frame, while the broader S&P 500 Index ($SPX) has gained 11.5%. Moreover, on a YTD basis, the stock is up 10.8%, compared to SPX’s slight rise.
Zooming in further, COF has also outperformed the Financial Select Sector SPDR Fund’s (XLF) 21.6% return over the past 52 weeks and 6.1% uptick on a YTD basis.
Shares of COF surged 3.7% on the following day after its mixed Q1 earnings release on Apr. 22. On the downside, the company posted revenue of $10 billion, which advanced 6.4% from the year-ago quarter but marginally missed the consensus estimates. Moreover, its credit quality weakened compared to the same quarter last year, with increases in both allowance for credit losses and net charge-offs. Nonetheless, its adjusted EPS came in strong at $4.06, surpassing estimates by 10.9% and marking a 26.5% year-over-year increase, driven by effective cost management. Additionally, its net interest income rose 7%, while the net interest margin also improved from the prior-year period.
For the current fiscal year, ending in December, analysts expect COF’s EPS to grow 9% year over year to $15.21. The company’s earnings surprise history is mixed. It topped the consensus estimates in three of the last four quarters, while missing on another occasion.
Among the 21 analysts covering the stock, the consensus rating is a “Moderate Buy” which is based on 14 “Strong Buy,” one “Moderate Buy,” and six “Hold” ratings.
This configuration is slightly more bullish than two months ago, with 13 analysts suggesting a “Strong Buy” rating.
On May 15, Moshe Orenbuch from TD Cowen maintained a “Hold” rating on COF, with a price target of $184.
The mean price target of $213.85 represents an 8.3% premium from COF’s current price levels, while the Street-high price target of $264 suggests an upside potential of 33.7%.
