William Blair Reiterates Market Perform On Capital One Financial

In a research report issued today, William Blair analyst Robert Napoli reiterated a Market Perform rating on Capital One Financial Corp. (NYSE:COF). No price target was provided.

Napoli noted, “We expect loan growth to get to 7% and would not be shocked by slightly higher levels. Net interest margins are stable. Management expects credit losses to move from the high 2% range to the high 3% range over the next year and believes the current quarter was artificially low. Is this finally the turn in credit? Given the loan growth acceleration and flattening delinquencies, it could be. Consumer and commercial segments are experiencing incremental competitive stress. The auto finance business has become incrementally competitive, and while returns remain attractive, they have declined. The commercial business is a concern to us as the revenue yield has dropped about 50 basis points year-over-year while the cost of funds is only down 3 basis points. Management seemed most concerned about the commercial segment. Credit trends in commercial remain incredibly strong, with negative charge-offs (i.e., net recoveries). Auto credit has started to increase, though modestly. “

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Robert Napoli has a total average return of 18.8% and a 38.5% success rate. Napoli is ranked #581 out of 3336 analysts.

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