Capital One and Kohl’s Extend Credit Card Partnership

Financial services major Capital One Financial Corporation (NYSE: COF) recently revealed the extension of its credit card program agreement with department store retail chain operator Kohl’s (NYSE: KSS). The extended agreement was with Capital One National Association, a subsidiary of Capital One.

Following the news, shares of the company gained marginally to close at $138.21 in Friday’s trading session.

Strategic Impact

With the aim of providing customers with quality products and an enhanced shopping experience, the extension of the partnership is expected to be mutually beneficial for both companies.

Kohl’s private label credit card program, Kohl’s Card, will allow customers access to exclusive offers, guaranteed savings, and online payment services, which is likely to result in enhanced sales and footfall in its stores.

Meanwhile, Capital One stands to gain by getting access to Kohl’s wide and loyal customer base across the nation. Notably, the companies have agreed to pilot a co-branded card product as early as 2023.

Management Commentary

SVP of Card Partnerships at Capital One, Buck Stinson, said, “From the start of our partnership with Kohl’s in 2011, our shared focus on innovation and growth has allowed our organizations to strategically invest to deliver exceptional value to customers.

“This extension is a testament to our commitment to building long-standing, mutually beneficial partnerships and demonstrates how we build relationships and deliver results over the long term.”

Wall Street’s Take

Recently, Bank of America Securities analyst Mihir Bhatia reiterated a Buy rating on the stock. The analyst, however, lowered the price target from $185 to $167, which implies upside potential of 20.8% from current levels.

According to the analyst, the sentiments around the financial sector remain muted. However, the analyst opines the same is likely to improve along with earnings visibility in the future.

Consensus among analysts is a Moderate Buy based on 14 Buys and five Holds. The average Capital One price target of $180.69 implies upside potential of 30.7% from current levels. Shares have gained about 10% over the past year.

Positive Investor Sentiment

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on COF. Further, 9.7% of portfolios tracked by TipRanks increased their exposure to COF stock over the past 30 days.

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