Jefferies Cuts Numbers on Capital One; Maintains "Buy" Rating (COF)

Jefferies Cuts Numbers on Capital One; Maintains “Buy” Rating (COF)


Early on Tuesday, analysts at Jefferies & Co. lowered the price target and earnings estimates on financial services company Capital One Financial Corp. (COF), but maintained a positive view saying the stock is cheap and has upside.

The analysts back their “Buy” rating on COF, but lowered the price target from $67 to $60. This new target suggests an 18% upside to Monday’s closing price of $50.80.

“We’re lowering our FY’13 EPS estimate to $6.33 from $6.72 and our FY’14 EPS estimate from $7.16 to $6.56 due primarily to the $7B Best Buy card portfolio sale,” A Jefferies analyst commented. “With a good bit of bad news (Jan credit hiccup, CFO departure, Best Buy sale) priced into the stock currently, we see upside from current levels. COF currently trades at ~8x our FY’14 estimate, a 3 turn discount to other regional banks.”

Capital One shares were up 86 cents, or +1.70%, during pre-market trading on Tuesday. The stock is up about +3% over the past twelve months.

The Bottom Line
Shares of Capital One (COF) have a dividend yield of 0.39% based on last night’s closing price of $50.80 and the company’s annualized dividend payout of 20 cents per share.

Capital One Financial Corp. (COF) is not recommended at this time, holding a DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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