Wall Street Zen Downgrades Capital One Financial (NYSE:COF) to Hold

Key Points

• Wall Street Zen downgraded Capital One Financial to “hold” from “buy,” although the broader analyst consensus remains “Moderate Buy,” with 20 buy ratings and four hold ratings and an average price target of $259.14.
• Capital One reported better-than-expected quarterly results, including EPS of $5.81 versus the $4.79 consensus and revenue of $15.83 billion, up 26.9% year over year.
• Recent developments present mixed signals: institutional investors own 89.84% of shares, while insiders sold roughly $2.1 million in stock during the latest quarter; analysts have also reduced several price targets.

Capital One Financial (NYSE:COF) was downgraded by research analysts at Wall Street Zen from a "buy" rating to a "hold" rating in a research report issued to clients and investors on Sunday.

A number of other research firms have also issued reports on COF. Weiss Ratings upgraded Capital One Financial from a "hold (c)" rating to a "hold (c+)" rating in a report on Thursday. Evercore lowered their price target on Capital One Financial from $265.00 to $222.00 and set an "outperform" rating on the stock in a report on Monday, April 6th. Royal Bank Of Canada dropped their price target on Capital One Financial from $275.00 to $235.00 and set a "sector perform" rating on the stock in a research report on Friday, April 10th. Wells Fargo & Company reduced their price objective on Capital One Financial from $280.00 to $260.00 and set an "overweight" rating for the company in a research note on Thursday, April 9th. Finally, Barclays decreased their price objective on Capital One Financial from $242.00 to $240.00 and set an "overweight" rating for the company in a research report on Wednesday, July 22nd. Twenty investment analysts have rated the stock with a Buy rating and four have given a Hold rating to the stock. According to data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average target price of $259.14.

Capital One Financial Price Performance

COF opened at $208.90 on Friday. The company has a fifty day moving average price of $197.71 and a two-hundred day moving average price of $199.02. The firm has a market capitalization of $128.16 billion, a PE ratio of 12.93, a P/E/G ratio of 0.77 and a beta of 1.02. Capital One Financial has a 52 week low of $174.24 and a 52 week high of $259.64. The company has a debt-to-equity ratio of 0.39, a quick ratio of 1.02 and a current ratio of 1.02.

Capital One Financial (NYSE:COF - Get Free Report) last posted its quarterly earnings results on Tuesday, July 21st. The financial services provider reported $5.81 earnings per share for the quarter, beating analysts' consensus estimates of $4.79 by $1.02. Capital One Financial had a return on equity of 11.28% and a net margin of 13.37%.The company had revenue of $15.83 billion for the quarter, compared to the consensus estimate of $15.76 billion. During the same quarter in the prior year, the business posted $5.48 EPS. The firm's quarterly revenue was up 26.9% on a year-over-year basis. As a group, analysts anticipate that Capital One Financial will post 20.19 earnings per share for the current year.

Insider Transactions at Capital One Financial

In other news, General Counsel Matthew W. Cooper sold 3,500 shares of the company's stock in a transaction dated Tuesday, July 7th. The shares were sold at an average price of $208.00, for a total transaction of $728,000.00. Following the completion of the transaction, the general counsel owned 90,194 shares of the company's stock, valued at approximately $18,760,352. This represents a 3.74% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Timothy P. Golden sold 3,487 shares of the firm's stock in a transaction that occurred on Wednesday, July 29th. The stock was sold at an average price of $211.00, for a total value of $735,757.00. Following the completion of the sale, the chief accounting officer owned 7,429 shares of the company's stock, valued at $1,567,519. This represents a 31.94% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 10,487 shares of company stock worth $2,107,512 over the last quarter. 0.78% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Capital One Financial

A number of institutional investors have recently added to or reduced their stakes in the stock. Evolution Wealth Management Inc. increased its holdings in Capital One Financial by 529.4% in the fourth quarter. Evolution Wealth Management Inc. now owns 107 shares of the financial services provider's stock valued at $26,000 after purchasing an additional 90 shares during the last quarter. VSM Wealth Advisory LLC bought a new position in Capital One Financial during the fourth quarter worth about $27,000. Cherry Tree Wealth Management LLC boosted its holdings in Capital One Financial by 1,312.5% during the fourth quarter. Cherry Tree Wealth Management LLC now owns 113 shares of the financial services provider's stock worth $27,000 after buying an additional 105 shares during the last quarter. Ballast Advisors LLC acquired a new position in shares of Capital One Financial during the 1st quarter worth about $27,000. Finally, Strive Asset Management LLC acquired a new position in shares of Capital One Financial during the 3rd quarter worth about $28,000. 89.84% of the stock is owned by institutional investors and hedge funds.

Key Capital One Financial News

Here are the key news stories impacting Capital One Financial this week:

• Positive Sentiment: Capital One’s second-quarter results were substantially stronger, with net income of approximately $3.02 billion versus a loss a year earlier. The company also reaffirmed its $0.80 quarterly common dividend and declared preferred-stock dividends, supporting the capital-return outlook. Did Capital One’s Q2 Profit Rebound and Dividend Moves Just Shift Capital One Financial's Investment Narrative?
• Positive Sentiment: Capital One’s purchase volume reportedly grew 26%, reinforcing the potential benefits of its Discover acquisition and expansion into card payment processing. However, legacy Discover purchase volume increased less than 2%, highlighting integration and growth challenges that investors will continue to monitor. Capital One's Purchase Volume Grew 26%, but Legacy Discover Volume Rose Less Than 2%
• Neutral Sentiment: An investment analysis highlighted Capital One’s preferred-stock dividends and common dividend as potentially attractive sources of income. The company’s $0.80 quarterly dividend equates to $3.20 annually, with a reported yield of about 1.5%. Capital One Financial: Boosting The Income With Preferred Stock
• Negative Sentiment: Capital One said it closed more than 300 accounts affiliated with the Trump Organization following a months-long review by its anti-money-laundering team, according to a court filing reported by Reuters. The disclosure may raise reputational, political and regulatory concerns, potentially explaining the near-term weakness in COF. Capital One Says It Closed Trump Organization’s Accounts After Anti-Money-Laundering Probe
• Negative Sentiment: Chief Accounting Officer Timothy Golden sold 3,487 shares for approximately $735,757, reducing his direct holdings by nearly 32%. While a single insider sale does not establish a bearish trend, it may add modest negative sentiment. Timothy Golden Sells 3,487 Shares of Capital One Financial Stock

Capital One Financial Company Profile

Capital One Financial Corporation NYSE: COF is a diversified bank holding company headquartered in McLean, Virginia. The company's core businesses include credit card lending, consumer and commercial banking, and auto finance. Capital One issues a wide range of credit card products for consumers and small businesses, and it operates deposit and digital banking services aimed at retail customers and small to midsize enterprises.

Products and services include credit and charge cards, checking and savings accounts (including the online-focused Capital One 360 platform), auto loans, and commercial lending solutions.

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