Capital One Financial CorporationNYSE
Tue, Dec. 6, 3:18 PM
- After a three standard deviation move in large-cap bank stocks, it seems logical to think about heading to the sidelines, says analyst Betsy Graseck. But should the names pull back, she recommends adding to positions as the bull case still outweighs the bear case next year.
- Using base case 2018 estimates and a target P/E of 12x implies 14% upside for Morgan's eight Overweight-rated stocks. The bull case on 2018 estimates with the same target P/E means upside of 41%.
- Top picks are Citigroup (NYSE:C), Synchrony Financial (NYSE:SYF) on stronger capital returns; Bank of America (NYSE:BAC) on higher rates and lower expenses; Goldman Sachs (NYSE:GS) on rising market volatility and improving VAR productivity; JPMorgan and Wells Fargo (NYSE:WFC) on stronger loan growth and expense management; Capital One (NYSE:COF) and Discover (NYSE:DFS) on rising consumer leverage and higher capital return.
Tue, Dec. 6, 10:33 AM
- Those most at risk are subprime-focused lenders, says Height Securites' Edwin Groshans, noting a FRBNY report showing auto loans continuing to grow and subprime delinquencies pointing to signs of distress.
- The National Auto Dealers Association November update showed continuing acceleration in used car price depreciation.
- Ally Financial (ALLY flat), for one, has been increasing subprime loans held on its balance sheet, and reported a Q3 increase in net charge-offs due in part to lower recovery rates on repossessed autos.
- Others of note: Credit Acceptance (CACC -0.5%), Santander Consumer (SC -0.6%), Capital One (COF -0.6%)
- Source: Bloomberg
Fri, Nov. 18, 8:25 AM
- Analyst Jame Fotheringham takes advantage of the big post-election rally in Wells Fargo (NYSE:WFC), CIT Group (NYSE:CIT) and World Acceptance (NASDAQ:WRLD) to downgrade each to Underperform from Market Perform. Regional Management (NYSE:RM) is downgraded as well, to Market Perform from Outperform.
- He notes there's still value in names like Capital One (NYSE:COF), Morgan Stanley (NYSE:MS), and Ally Financial (NYSE:ALLY), even though they too have had strong moves.
Wed, Nov. 16, 12:33 PM
- “Take profits and selectively reduce exposure,” says Baird's David George, pulling his Outperform rating on Bank of America (BAC -1.9%) after the stock blasted through his $17 price target.
- BofA is higher by nearly 20% since the election, and by more than 60% since late June.
- The rally over the last few sessions alone has priced in higher rates, lower taxes, and more aggressive capital return, he says, and he advises investors to wait and actually see if structural improvement in macro trends actually materializes.
- George also cuts Capital One (COF -2.9%) to Neutral from Outperform, and Fifth Third (FITB -3%) to Underperform from Neutral.
- Previously: Sell-side takes profits on banks (Nov. 16)
Wed, Nov. 16, 7:17 AM
- The SPDR KBW Bank ETF (NYSEARCA:KBE) is now up 18.9% YTD - this after a miserable start to 2016. Since February 11, the fund is higher by 46%. Since July 1, it's up 32%, and since the election 15%.
- With bullish price targets being hit and surpassed across the sector, the downgrades are pouring in.
- Among them, U.S. Bancorp sees its 2nd downgrade in two days. Others: Fifth Third (NASDAQ:FITB), First Republic (NYSE:FRC), Citizens Financial (NYSE:CFG), Capital One (NYSE:COF), Zions Bancorp (NASDAQ:ZION), KeyCorp (NYSE:KEY), Webster Financial (NYSE:WBS), NBT Bancorp (NASDAQ:NBTB), Sterling Bancorp (NYSE:STL), First Connecticut (NASDAQ:FBNK), Regions Financial (NYSE:RF)
Mon, Nov. 14, 8:23 AM
- Noting a pricey valuation after the stock's big run higher, analyst Chris Brendler downgrades Capital One (NYSE:COF) to Hold from Buy. As for possible positive catalysts from a Trump administration, Brendler doesn't think those will be felt for years. His price target of $84 compares to Friday's close of $80.99.
- At this point, he's more upbeat about Discover (NYSE:DFS) as it has lower risk and is more leveraged to the changes being sought by Trump.
Thu, Nov. 3, 5:45 PM
Thu, Oct. 27, 12:32 PM
- "Losses are going to go higher - there's no question about that," says Hylton Heard, senior director at Fitch. Prices of used cars up to eight years old are down 3.6% in the year's first nine months, according to J.D. Power. It's the first "material" decline in prices since 2008, says the company's Larry Dixon.
- The country's 2nd-largest auto-lender by volume, Ally Financial (NYSE:ALLY) this week said it started seeing used-car values fall in Q3. The company wrote off an annualized 1.37% of its loans in Q3, up from 1.01% a year earlier and the highest charge-off rate since at least the end of 2012.
- Also this week, Capital One (NYSE:COF) lifted provisions, citing stronger originations and expectations of rising charge-offs as used-car values decline.
- The country's largest auto-lender, Wells Fargo (NYSE:WFC) has responded to signs of weakness by tapping the brakes, writes Annamaria Andriotis in the WSJ, noting a 2% Y/Y fall in Q3 auto-loan originations.
Tue, Oct. 25, 4:11 PM
Mon, Oct. 24, 5:35 PM
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Mon, Oct. 24, 9:26 AM
- Missed payments on recently-issued credit cards are higher than that on older cards, according to TransUnion - almost 3% of outstanding balances on credit cards issued in 2015 were at least 90 days six months after origination versus 2.2% for cards issued in 2014 and 1.5% for 2013.
- That's pushed up the overall 90 days late or more average to 1.53% in Q3 - the highest level since 2012.
- The renewed push into subprime lending is likely the culprit - more than 20M credit cards were issued to subprime borrowers in 2015, up 20% from 2014 and 56% from 2013, according to Equifax.
- Taking a look at oil patch states, the share of card balances 90 days or more past due in Q3 rose 12% Y/Y in Oklahoma, 10% in Texas, and 20% in Wyoming.
- Interested parties: COF, SYF, DFS
Mon, Oct. 3, 7:49 AM
- A consortium of investors has emerged as the leading bidder for Cabela's (NYSE:CAB), sources tell Reuters.
- The group includes Bass Pro Shops, the PE arm of Goldman Sachs (NYSE:GS), and Capital One Financial (NYSE:COF).
- Speculation on a Cabela's buyout has gone on for almost a year after the company opened itself up to considering strategic alternatives.
- CAB +5.59% premarket to $58.00. Shares of the retailer are up 24.5% over the last 52 weeks.
Thu, Sep. 29, 4:19 PM
- Privately-held Bass Pro Shops is partnering with the private-equity arm of Goldman Sachs (NYSE:GS), and they're working on a bid with Capital One (NYSE:COF), which is interested in Cabela's (NYSE:CAB) credit card business, according to Reuters' sources.
- Then there's P-E outfit Sycamore Partners which is pairing with Synchrony Financial (NYSE:SYF) to make an offer.
- Binding bids are due this week.
- Cabela's credit card business is called World's Foremost Bank, and it had nearly 2M accounts, $5B in loans, and $502M in revenue last year.
- Cabela's closed the session higher by 2.3%, with all of that gain coming in the last few minutes as this report hit the wires.
Tue, Sep. 13, 2:09 AM
- Despite the penalties imposed on Wells Fargo (NYSE:WFC), there is probably no broader problem in the U.S. banking industry over abusive sales practices, according to the head of the Consumer Financial Protection Bureau.
- Regulators fined the company a total of $185M last Thursday, while Moody's warned the episode would negatively affect the bank's debt. Wells paid another $5M to customers for creating more than 2M fake accounts.
- Related tickers: JPM, C, BAC, MS, USB, COF, FITB, TD, PNC, STI
Thu, Sep. 1, 4:09 AM
- Despite an increasing regulatory burden and lackluster share performance, the U.S. banking industry just logged its most profitable quarter ever, according to figures from SNL Financial and S&P Global Market Intelligence.
- Earnings for the three-month period totaled $43.6B, compared to the $43.01B in Q2 of 2015, a 1.4% beat.
- On a sequential basis, the April-to-June period topped the previous quarter by $4.56B, an 11.7% rise.
- Related tickers: JPM, C, BAC, WFC, GS, MS, USB, BK, STT, PNC, COF
Thu, Jul. 28, 1:07 PM