UPDATE: Jefferies Upgrades Capital One Financial (COF) to Buy
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Price: $145.97 -1.95%
Rating Summary:
15 Buy, 22 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
15 Buy, 22 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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(Updated - March 19, 2012 10:20 AM EDT)
Shares of Capital One Financial (NYSE: COF) are moving 1 percent higher early Monday after analyst at Jefferies upgraded the stock from Hold to Buy and lifted their price target from $50 to $72. The new price target represents 32 percent upside to Friday's close.
The firm believes that with the ING and HSBC acquisitions and associated equity raises complete, "much of the downside risk to COF shares has been removed." The firm had preferred Discover Financial (NYSE: DFS) prior to the approval, but now that these overhangs have been reduced they see greater upside in Capital One.
They also expect credit "normalization" in the important credit card space as the US economy continuing to show modest strength.
Also shares are cheap, the firm contends. Trading at 7.75x 2013 consensus EPS, they are at a sharp discount to American Express (NYSE: AXP) at 11.8x and Discover Financial at 9.1x. Additionally, the larger bank comp group trades at 10.2x. "Should the US economy continue to show signs of improvement, we believe
COF will outperform the peer group considering the current inexpensive valuation."
While earnings results are likely to be choppy over the next few quarter, the most problematic downside scenarios have been removed.
For an analyst ratings summary and ratings history on Capital One Financial click here. For more ratings news on Capital One Financial click here.
Shares of Capital One Financial closed at $54.50 yesterday.
Shares of Capital One Financial (NYSE: COF) are moving 1 percent higher early Monday after analyst at Jefferies upgraded the stock from Hold to Buy and lifted their price target from $50 to $72. The new price target represents 32 percent upside to Friday's close.
The firm believes that with the ING and HSBC acquisitions and associated equity raises complete, "much of the downside risk to COF shares has been removed." The firm had preferred Discover Financial (NYSE: DFS) prior to the approval, but now that these overhangs have been reduced they see greater upside in Capital One.
They also expect credit "normalization" in the important credit card space as the US economy continuing to show modest strength.
Also shares are cheap, the firm contends. Trading at 7.75x 2013 consensus EPS, they are at a sharp discount to American Express (NYSE: AXP) at 11.8x and Discover Financial at 9.1x. Additionally, the larger bank comp group trades at 10.2x. "Should the US economy continue to show signs of improvement, we believe
COF will outperform the peer group considering the current inexpensive valuation."
While earnings results are likely to be choppy over the next few quarter, the most problematic downside scenarios have been removed.
For an analyst ratings summary and ratings history on Capital One Financial click here. For more ratings news on Capital One Financial click here.
Shares of Capital One Financial closed at $54.50 yesterday.
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