Capital One Financial (COF) stock gained in after-hours trading following the release of second-quarter results. Adjusted earnings per share came in at $5.48, which easily beat analysts’ consensus estimate of $4.04 per share. In addition, sales increased by 25% year-over-year, with revenue hitting $12.5 billion. This slightly missed analysts’ expectations of $12.72 billion.
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Without adjusting for one-time charges tied to its recent acquisition of Discover Financial, completed in May 2025, the company reported a net loss of $4.3 billion for the second quarter of 2025, or $8.58 per share.
Core Business Shows Strength
Ignoring the net loss, Capital One’s core operations delivered solid results. The bank’s net interest margin, a key metric to assess a bank’s profitability, expanded 69 basis points to 7.62%. Further, COF posted a 72% surge in Credit card loans to $269.7 billion, reflecting Discover’s portfolio.
CEO Richard Fairbank said integration is “going well” and emphasized the company’s excitement about the combined platform’s growth potential.
Total loans held for investment rose by 36% to $439.3 billion, due to a jump across all loan portfolios. Consumer and Auto loans both grew by 3%. Also, deposits climbed 27% to $468.1 billion.
In terms of capital ratios, Capital One ended the quarter with a Common Equity Tier 1 capital ratio of 14%.
On the flip side, provision for credit losses increased to $11.4 billion, driven by the Discover reserve build and $3.1 billion in net charge-offs. However, this marks a necessary move to align loan loss expectations after the merger.
Is COF Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on COF stock based on 13 Buys and three Holds assigned in the past three months. Further, the average Capital One stock price target of $244.57 per share implies 12.49% upside potential.
