Opinions
Jim McGovern
Capital One Financial Corp
COF-N
TOP PICK
Jun 05, 2017
$78.330
Stock price when the opinion was issued
finance
leasing
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WEAK BUY
It's the 10th-largest US bank, at 8x PE. They expanded from credit cards into banking, and are building a strong brand. They're using technology to drive efficiency, will move to the cloud later this year. The trouble they'll have is that their client base on the retail side is weaker than peers like JP Morgan. COF isn't expensive and have grown impressively. Tech will make them more efficiency and overall COF will perform better post-Covid.
finance
leasing
*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.)