William Blair Maintains Market Perform On Capital One, But Sees Shares As Attractive

In a research note released yesterday, William Blair analyst Robert Napoli maintained a Market Perform rating on Capital One Financial  (COF) ahead of  second-quarter earnings results. The company is scheduled to report the results after the markets close on Thursday, July 17, followed by an earnings call at 5 p.m. Eastern time. No price target was assigned.

Napoli noted, “We maintain our Market Perform rating, primarily due to weaker long-term secular growth relative to primary payments peers that are part of our coverage universe; however, we believe Capital One shares are attractive, especially relative to regional bank stocks. We would like to see Capital One grow fee-based payments business related to the credit card space as it adds growth potential, increases returns, and reduces credit sensitivity. We believe it can generate a midteens return on tangible equity over the long term. We view Capital One as a specialty finance bank with an above-average, high-return proprietary credit card business with an average full spectrum auto finance business and a niche commercial finance business”.

According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Robert Napoli currently has a one-year average return of 28.7% and an 63% success rate. Napoli is ranked #729 out of 3217 analysts.

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