Analyst Moshe Orenbuch of TD Cowen maintained a Buy rating on Capital One Financial, retaining the price target of $261.00.
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Moshe Orenbuch has given his Buy rating due to a combination of factors including the potential benefits from Capital One Financial’s acquisition of Discover. This deal is expected to enhance Capital One’s return on tangible equity (ROTE) and earnings per share (EPS) over time. The company is poised to benefit from improved credit trends and a robust buyback cycle, supported by its substantial excess capital.
Moreover, the acquisition is anticipated to bolster Capital One’s earnings capacity as it achieves targeted synergies such as debit migration and cost efficiencies. Although there may be a short-term impact on growth due to the tightening of Discover’s high balance revolving segment, the long-term outlook is positive. Capital One is expected to leverage the Discover brand for stronger growth starting in 2027, particularly in the auto sector where it is already gaining market share. Additionally, the company’s strong credit quality and strategic investments in the Discover network are likely to enhance its valuation.
According to TipRanks, Orenbuch is a top 100 analyst with an average return of 22.5% and a 69.73% success rate. Orenbuch covers the Financial sector, focusing on stocks such as American Express, Capital One Financial, and SLM.
In another report released on November 21, BTIG also maintained a Buy rating on the stock with a $264.00 price target.