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

Capital One Financial Corporation (NYSE:COF)’s stock price gapped down before the market opened on Friday following a weaker than expected earnings announcement. 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.

The financial services provider reported $3.86 earnings per share for the quarter, missing the consensus estimate of $4.14 by ($0.28). The firm had revenue of $15.62 billion for the quarter, compared to analyst estimates of $15.49 billion. Capital One Financial had a return on equity of 11.17% and a net margin of 3.54%.The business’s revenue for the quarter was up 53.3% on a year-over-year basis. During the same period in the previous year, the business posted $2.67 earnings per share.

Capital One Financial Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Monday, December 1st. Stockholders of record on Monday, November 17th were issued a dividend of $0.80 per share. This is an increase from Capital One Financial’s previous quarterly dividend of $0.60. This represents a $3.20 dividend on an annualized basis and a dividend yield of 1.5%. The ex-dividend date of this dividend was Monday, November 17th. Capital One Financial’s payout ratio is 135.02%.

Trending Headlines about Capital One Financial

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

Analyst Upgrades and Downgrades

COF has been the subject of a number of recent research reports. Weiss Ratings reissued a “hold (c)” rating on shares of Capital One Financial in a report on Monday, December 29th. Citigroup boosted their price target on Capital One Financial from $290.00 to $310.00 and gave the company a “buy” rating in a research note on Wednesday, December 31st. Morgan Stanley increased their price target on Capital One Financial from $280.00 to $300.00 and gave the stock an “overweight” rating in a research report on Tuesday. BTIG Research dropped their price objective on Capital One Financial from $308.00 to $270.00 and set a “buy” rating for the company in a report on Friday. Finally, Keefe, Bruyette & Woods increased their target price on Capital One Financial from $260.00 to $290.00 and gave the stock an “outperform” rating in a report on Friday, January 2nd. One analyst has rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating and six have issued a Hold rating to the company. Based on data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and an average target price of $277.75.

Insiders Place Their Bets

In other Capital One Financial news, insider Celia Karam sold 2,064 shares of Capital One Financial stock in a transaction dated Friday, January 2nd. The stock was sold at an average price of $244.35, for a total value of $504,338.40. Following the transaction, the insider owned 61,373 shares in the company, valued at $14,996,492.55. The trade was a 3.25% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Also, insider Frank G. LapradeIii sold 17,840 shares of the business’s stock in a transaction dated Thursday, November 13th. The stock was sold at an average price of $222.03, for a total value of $3,961,015.20. Following the transaction, the insider directly owned 48,315 shares of the company’s stock, valued at approximately $10,727,379.45. The trade was a 26.97% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 298,895 shares of company stock valued at $67,111,541 over the last ninety days. 1.26% of the stock is owned by insiders.

Institutional Trading of Capital One Financial

A number of hedge funds have recently added to or reduced their stakes in the stock. Moisand Fitzgerald Tamayo LLC increased its holdings in Capital One Financial by 103.3% in the 2nd quarter. Moisand Fitzgerald Tamayo LLC now owns 122 shares of the financial services provider’s stock worth $26,000 after purchasing an additional 62 shares in the last quarter. Olistico Wealth LLC increased its position in Capital One Financial by 439.1% in the 2nd quarter. Olistico Wealth LLC now owns 124 shares of the financial services provider’s stock valued at $26,000 after acquiring an additional 101 shares during the period. RMG Wealth Management LLC bought a new position in shares of Capital One Financial during the second quarter valued at $27,000. Atlantic Edge Private Wealth Management LLC lifted its holdings in shares of Capital One Financial by 66.7% during the second quarter. Atlantic Edge Private Wealth Management LLC now owns 125 shares of the financial services provider’s stock worth $27,000 after purchasing an additional 50 shares during the period. Finally, Signature Resources Capital Management LLC acquired a new position in shares of Capital One Financial during the second quarter worth $28,000. Institutional investors and hedge funds own 89.84% of the company’s stock.

Capital One Financial Stock 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 0.53 and a beta of 1.13. The company has a debt-to-equity ratio of 0.45, a current ratio of 1.03 and a quick ratio of 1.03. The stock has a fifty day moving average of $233.23 and a two-hundred day moving average of $223.32.

About Capital One Financial

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.