Erika Najarian, an analyst from UBS, maintained the Buy rating on Capital One Financial. The associated price target was raised to $270.00.
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Erika Najarian’s rating is based on a combination of factors that highlight the potential for Capital One Financial’s stock to appreciate significantly. The UBS HOLT framework suggests that the market is currently underestimating the company’s cash flow return on equity (CFROE), which implies limited recognition of the synergies following the DFS acquisition. The model projects a warranted price of $260 per share, indicating a potential upside of approximately 30% from current levels.
Additionally, Capital One Financial scores well on the HOLT scorecard, ranking 19th among North American banks, driven by strong momentum and valuation metrics. The projected growth in CFROE to 15% by 2029, supported by network integration benefits and improved efficiency, aligns closely with UBS’s price target of $270. Despite recent range-bound performance due to macroeconomic concerns, the stock remains undervalued, and the UBS HOLT analysis suggests significant upside potential, particularly if long-only investors increase their positions.
In another report released on November 18, Barclays also maintained a Buy rating on the stock with a $271.00 price target.