Oppenheimer Raises Price Target on Capital One Financial (COF) Following 3Q Report
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Oppenheimer reiterated an Underperform rating on Capital One Financial (NYSE: COF), and raised the price target to $60.00 (from $59.00), following the company's 3Q earnings report. Reported earnings were $1.92 vs. the consensus of $1.94 on a continuing ops basis. Core revenues were higher and market expense pulled back, driving core PPE to $3.2B vs. consensus' $3.0B estimate.
Analyst Ben Chittenden commented, "We've been warning investors for some time that we expected COF to raise its 2017 domestic card NCO guidance to the mid-4% range from low-4% based on the trends we could see in the delinquency formation data. 3Q16 ended up being the quarter when it happened. Thus, we expect '17 consensus estimate ($7.95) to accelerate its fall lower toward our estimate ($7.18). We continue to rate the stock Underperform as the process will play out over time, as many investors still believe 2018 will be a "coiled spring" earnings acceleration year. We continue to see ample evidence that subprime borrowers are seeing pressure, and losses are likely to rise at a time when COF continues ramping up exposure."
Shares of Capital One Financial closed at $75.39 yesterday.
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