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Jim Cramer - Mad Money Capital One Financial Corp COF-N BUY Jan 25, 2023

Their just-released quarter shot the lights out, with great loan growth and defaults well below pre-Covid levels. Shares surged over $9 today. The street expected their credit card business would be plagued by defaults, but those folks were wrong.

Jim Cramer - Mad Money

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$116.090

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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.

HOLD

Likes some of the credit card companies. They make sense. Secular push from cash to electronic payments. Likes this name, but watch its auto loans and sub-prime lending. Technically, has performed well since the lows of last year. See his Top Picks.

DON'T BUY

The company itself is fine, but the capital/lending cycle concerns him, where bankruptcies will increase and decrease earnings, buybacks and dividends.

BUY

His favourite in this industry, given the Discover-Capital One merger because he doesn't expect usery fees.

BUY

The merger with Discover creates the largest credit card company in the US. COF's balance sheet is strong.

BUY

With regulation ahead, it's now more likely that their deal with Discover Financial will finally close--it's been taking forever. If so, COF could go up 25 points. No matter what, COF will be fine.

BUY

The merger with Discover is complete. It's his favourite holding. Despite gaining 20 points in May, he sees more upside and analyst upgrades.

BUY

Tuesday they deliver commentary which he expects to be positive about their synergistic deal with Discover. Maybe that's why shares were up today.

BUY

Banks are a winning sector and his favourite here is COF. It just closed a deal with Discovery Financial, which will turn COF's credit card business into a bigger business.

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