Capital One Financial (COF – Research Report), the Financial sector company, was revisited by a Wall Street analyst today. Analyst Mihir Bhatia from Bank of America Securities maintained a Buy rating on the stock and has a $233.00 price target.
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Mihir Bhatia has given his Buy rating due to a combination of factors surrounding Capital One Financial’s recent strategic moves. The acquisition of Discover Financial is a significant driver, as it presents opportunities to enhance Capital One’s product offerings across its deposit, bank, and card franchises. The potential synergies from this acquisition are expected to improve credit metrics and reduce expenses, making the company more efficient and competitive.
Bhatia also raised the price objective for Capital One to $233, reflecting the anticipated benefits from the acquisition and the expected synergies by 2027. Despite potential short-term accounting noise from one-time costs and legal settlements, Bhatia believes that investors will focus on the long-term growth prospects and the enhanced return on equity. The higher price objective is based on a 10x PE multiple, which is justified by the potential for improved financial performance and downside protection from synergies.
In another report released on May 16, KBW also maintained a Buy rating on the stock with a $232.00 price target.