Stock price when the opinion was issued
The stock has run up recently after buying Discover, a major payment network that issues its own cards, but also processes payments. Visa and Mastercard don't do both. COF can scale up to a global payments platform. There's a prediction of a $7-10 billion share buyback after an internal review. Sells at a cheap 11x 2026 PE vs. AmEx's 20x PE. This has a lot more room to run.
*Short*. The Company derives a good chunk of its revenue through its credit card business of about 40%, and its auto financing business, another 20%. Of that business, approximately one 3rd is subprime. One weak link in the US market is the subprime market where delinquencies and some of the charges are going to increase. Dividend yield of 2.1%. Thinks the stock can trade down to $59. (Analysts’ price target is $98.)