Capital One Financial (NYSE:COF) Shares Gap Down Following Weak Earnings

Capital One Financial Corporation (NYSE:COF) gapped down before the market opened on Friday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $235.07, but opened at $223.79. Capital One Financial shares last traded at $225.20, with a volume of 2,108,084 shares traded.

The financial services provider reported $3.86 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $4.14 by ($0.28). The company had revenue of $15.62 billion during the quarter, compared to the consensus estimate of $15.49 billion. Capital One Financial had a return on equity of 11.17% and a net margin of 3.54%.The firm’s quarterly revenue was up 53.3% compared to the same quarter last year. During the same quarter in the prior year, the business earned $2.67 earnings per share.

Capital One Financial Increases Dividend

The company also recently declared a quarterly dividend, which was paid on Monday, December 1st. Investors of record on Monday, November 17th were paid a dividend of $0.80 per share. The ex-dividend date of this dividend was Monday, November 17th. This represents a $3.20 dividend on an annualized basis and a dividend yield of 1.5%. This is a boost from Capital One Financial’s previous quarterly dividend of $0.60. Capital One Financial’s dividend payout ratio is presently 108.11%.

Key Capital One Financial News

Here are the key news stories impacting Capital One Financial this week:

• Positive Sentiment: Strategic upside — The Brex acquisition accelerates Capital One’s push into AI-enabled business payments, spend management and stablecoin-capable payments, expanding addressable markets (management cites a target of up to $2T in business payments). Article Title
• Positive Sentiment: Investor/manager interest — Some institutional investors and managers are publicly buying COF on the pullback, signaling conviction in the company’s longer-term fintech strategy. Article Title
• Neutral Sentiment: Mixed quarter — Revenue topped estimates and grew strongly year-over-year (helpful for top-line momentum), but the company reported an adjusted EPS shortfall versus consensus. That leaves fundamentals mixed in the near term. Article Title
• Neutral Sentiment: Deal mechanics — The Brex purchase is a mix of cash and Capital One stock (roughly half/half), which preserves cash but introduces share issuance and potential near-term dilution. Article Title
• Negative Sentiment: Earnings miss and cost pressure — Adjusted Q4 EPS fell short of consensus, driven by higher expenses and increased credit-loss provisions, which is the primary near-term catalyst for selling pressure. Article Title
• Negative Sentiment: Analyst caution and price-target trims — Several firms adjusted price targets and reiterated concerns around integration, credit and regulatory risk; that analyst reaction amplifies near-term downside risk. Article Title
• Negative Sentiment: Market reaction — Traders are selling on the combination of the EPS miss and the large acquisition, increasing volume and volatility as investors weigh near-term headwinds against long-term strategy. Article Title

Wall Street Analysts Forecast Growth

Several analysts have issued reports on the stock. Zacks Research downgraded shares of Capital One Financial from a “strong-buy” rating to a “hold” rating in a research note on Monday, November 24th. Deutsche Bank Aktiengesellschaft reduced their price target on Capital One Financial from $263.00 to $256.00 and set a “hold” rating on the stock in a report on Friday. Wells Fargo & Company boosted their price objective on Capital One Financial from $265.00 to $280.00 and gave the company an “overweight” rating in a report on Monday, January 5th. Royal Bank Of Canada reiterated a “sector perform” rating and issued a $275.00 target price on shares of Capital One Financial in a research note on Monday, January 12th. Finally, JPMorgan Chase & Co. boosted their target price on shares of Capital One Financial from $237.00 to $256.00 and gave the company a “neutral” rating in a research note on Monday, January 12th. One analyst has rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating and six have assigned a Hold rating to the stock. According to MarketBeat.com, Capital One Financial has an average rating of “Moderate Buy” and an average target price of $276.70.

Insider Buying and Selling at Capital One Financial

In other Capital One Financial news, CEO Richard D. Fairbank sold 103,487 shares of the stock in a transaction dated Tuesday, November 4th. The shares were sold at an average price of $220.68, for a total transaction of $22,837,511.16. Following the transaction, the chief executive officer directly owned 4,001,228 shares in the company, valued at $882,990,995.04. This represents a 2.52% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, insider Lia Dean sold 3,269 shares of the firm’s stock in a transaction dated Monday, December 1st. The shares were sold at an average price of $218.15, for a total transaction of $713,132.35. Following the transaction, the insider directly owned 69,855 shares in the company, valued at $15,238,868.25. This trade represents a 4.47% decrease in their position. The SEC filing for this sale provides additional information. In the last ninety days, insiders have sold 298,895 shares of company stock worth $67,111,541. Insiders own 1.26% of the company’s stock.

Hedge Funds Weigh In On Capital One Financial

A number of large investors have recently bought and sold shares of the business. Earned Wealth Advisors LLC acquired a new stake in shares of Capital One Financial in the second quarter worth approximately $254,000. Cortland Associates Inc. MO purchased a new position in Capital One Financial during the third quarter worth approximately $14,391,000. CIBC Asset Management Inc boosted its holdings in shares of Capital One Financial by 53.9% in the 2nd quarter. CIBC Asset Management Inc now owns 88,505 shares of the financial services provider’s stock valued at $18,830,000 after purchasing an additional 30,991 shares during the last quarter. Smith Chas P & Associates PA Cpas grew its stake in shares of Capital One Financial by 1,490.0% during the 2nd quarter. Smith Chas P & Associates PA Cpas now owns 43,486 shares of the financial services provider’s stock valued at $9,252,000 after buying an additional 40,751 shares during the period. Finally, Montecito Bank & Trust acquired a new stake in shares of Capital One Financial during the 3rd quarter worth $647,000. Institutional investors own 89.84% of the company’s stock.

Capital One Financial Trading Down 7.5%

The firm has a market capitalization of $138.26 billion, a price-to-earnings ratio of 73.47, a P/E/G ratio of 0.49 and a beta of 1.13. The company has a debt-to-equity ratio of 0.45, a quick ratio of 1.03 and a current ratio of 1.03. The business has a fifty day moving average price of $233.23 and a 200 day moving average price of $223.36.

Capital One Financial Company Profile

Capital One Financial Corporation (NYSE: COF) is a diversified bank holding company headquartered in McLean, Virginia. The company’s core businesses include credit card lending, consumer and commercial banking, and auto finance. Capital One issues a wide range of credit card products for consumers and small businesses, and it operates deposit and digital banking services aimed at retail customers and small to midsize enterprises.

Products and services include credit and charge cards, checking and savings accounts (including the online-focused Capital One 360 platform), auto loans, and commercial lending solutions.