Nomura Securities Maintains a 'Neutral' on Capital One Financial (COF); DQs Worsened More Than Expected

Nomura Securities maintains a 'Neutral' on Capital One Financial (NYSE: COF) price target of $54.00.

Analyst, Bill Carcache, said, "Capital One reported July credit results for its managed loan portfolio. DQs worsened by more than expected, and sequential loan growth (including HSBC) turned negative. Including the impact of HSBC (NYSE: HBC), the US Card DQ rate came in at 3.09% in July, up 30bps from 2.79% in June (worse than our estimate of an 8bps increase). The reported US Card NCO rate came in at 2.62% in July and does not have a comparable prior-month data point (the company did not include the impact of HSBC in last month’s results). As a result, it is unclear whether there was any underlying improvement in the NCO rate this month. We continue to believe that Capital One will find it difficult to achieve the 7%+ growth necessary to offset the $10.5bn of expected runoff over the next twelve months."

FY12 EPS from $6.05 to $6.24, FY13 EPS from $6.92 to $6.78.

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 $55.04 yesterday.

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