TD Cowen analyst Moshe Orenbuch maintained a Hold rating on Capital One Financial (COF – Research Report) today and set a price target of $144.00.
Moshe Orenbuch has given his Hold rating due to a combination of factors observed in Capital One Financial’s recent financial data. The end-of-period domestic card loans showed a decline, albeit less than typically expected due to seasonal variations, pointing to a continued but moderating purchase volume growth. Year-over-year, there was a notable increase in card balances, yet the growth pace has slowed slightly compared to January figures. The growth for this quarter is tracking slightly higher than Orenbuch’s initial estimate, suggesting some positive momentum.
However, on the downside, card delinquencies decreased month-over-month, but less so than what seasonality might suggest, while year-over-year delinquencies increased. This could indicate a stabilization in credit, albeit with some caution due to potential impacts from a delayed tax season. Auto loans also displayed a year-over-year decline, with a hint of stabilization in industry pricing and margins. Despite these mixed signals, both card and auto losses are tracking higher than estimated, which may raise concerns about profitability. Combined, these factors contribute to Orenbuch’s decision to maintain a Hold rating, suggesting that while there are positive signs, there are also risks that prevent a more bullish outlook.
In another report released on February 29, UBS also maintained a Hold rating on the stock with a $140.00 price target.
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Capital One Financial (COF) Company Description:
Capital One Financial Corporation is a diversified banking company which primarily focuses on consumer and commercial lending as well as deposit origination. It engages in providing personal and commercial banking, credit cards, loans, savings and time deposits, treasury management and depository services. The company primarily operates in the United States, Canada and the United Kingdom.
Read More on COF:
- Capital One Reports February Charge-Off and Delinquency Rates
- Capital One files automatic mixed securities shelf
- JPMorgan pursued Discover deal before Capital One made offer, FT reports
- White House to limit credit card late fees, Reuters reports
- Capital One to Present at Global Financial Institutions Conference
