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Capital One (COF) Well Poised for Growth Despite Headwinds
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On May 8, we issued an updated research report on Capital One Financial Corporation (COF - Free Report) . While the company should continue benefiting from strength in its credit card and online banking businesses, deteriorating credit quality and mounting expenses remain major near-term concerns.
The company’s shares have increased 15.4% in the last one year, outpacing the 10.2% gain for the Zacks categorized Financial - Consumer Loans industry.
Nonetheless, the stock’s current-year estimates were revised 1.4% downward, over the past 30 days. As a result, the stock currently carries a Zacks Rank #3 (Hold).
Capital One witnessed its revenues growing at a six-year (2011–2016) CAGR of 9.4%, with momentum continuing in first-quarter 2017. Continued synergies from geographic diversification and resilience of businesses will support revenue growth. Further, the proposed acquisition of Cabela’s Incorporated credit card operations will help to boost its top line.
Capital One has an efficient capital deployment strategy in place. With a solid balance sheet position, the company is expected to continue enhancing shareholder value.
However, Capital One’s deteriorating asset quality is a primary area of concern. In the next few quarters, asset quality will continue to be under pressure owing to losses in auto portfolio and U.S. card business.
Also, the company’s expenses have been increasing at a CAGR of 4% for the last five years (2012–2016). In fact, with increasing loan growth opportunities, marketing expenses are likely to remain elevated.
Northern Trust witnessed an upward earnings estimate revision of 2.4% for the current year, over the past 60 days. Also, over the last six months, its share price rose 17.9%.
Stifel Financial earnings estimates have been revised 1.6% upward for the current year in the past 60 days. Also, its share price increased 17.2% over the last six months.
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Capital One (COF) Well Poised for Growth Despite Headwinds
On May 8, we issued an updated research report on Capital One Financial Corporation (COF - Free Report) . While the company should continue benefiting from strength in its credit card and online banking businesses, deteriorating credit quality and mounting expenses remain major near-term concerns.
The company’s shares have increased 15.4% in the last one year, outpacing the 10.2% gain for the Zacks categorized Financial - Consumer Loans industry.
Nonetheless, the stock’s current-year estimates were revised 1.4% downward, over the past 30 days. As a result, the stock currently carries a Zacks Rank #3 (Hold).
Capital One witnessed its revenues growing at a six-year (2011–2016) CAGR of 9.4%, with momentum continuing in first-quarter 2017. Continued synergies from geographic diversification and resilience of businesses will support revenue growth. Further, the proposed acquisition of Cabela’s Incorporated credit card operations will help to boost its top line.
Capital One has an efficient capital deployment strategy in place. With a solid balance sheet position, the company is expected to continue enhancing shareholder value.
However, Capital One’s deteriorating asset quality is a primary area of concern. In the next few quarters, asset quality will continue to be under pressure owing to losses in auto portfolio and U.S. card business.
Also, the company’s expenses have been increasing at a CAGR of 4% for the last five years (2012–2016). In fact, with increasing loan growth opportunities, marketing expenses are likely to remain elevated.
A couple of better-ranked stocks in the finance space include Northern Trust Corporation (NTRS - Free Report) and Stifel Financial Corp. (SF - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Northern Trust witnessed an upward earnings estimate revision of 2.4% for the current year, over the past 60 days. Also, over the last six months, its share price rose 17.9%.
Stifel Financial earnings estimates have been revised 1.6% upward for the current year in the past 60 days. Also, its share price increased 17.2% over the last six months.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>