Capital One Financial rises after BofA upgrades to 'buy'

Discover Financial Services

19/02/2025 12:26

** Shares of consumer lender Capital One Financial  COF.N 
rise 1.6% to $206.01 premarket
    ** BofA Global Research upgrades COF to "buy" from
"neutral"; raises PT to $235 from $207, a 15.9% upside to
stock's last close
    ** Brokerage says improving credit trends, potential for
increased buybacks, and the pending $35.3 billion acquisition of
Discover Financial Services  DFS.N  provide a cascade of
catalysts for COF in the short-term that should excite investors
    ** COF, DFS shareholders on Tuesday voted in favor to
approve the transaction, marking another milestone towards deal
completion
    ** Deal still needs approval from the Federal Reserve and
the Office of the Comptroller of the Currency, with COF
anticipating the transaction will close in early 2025
    ** In the longer-term, BofA thinks the Discover acquisition
will enable COF to compete more effectively in the small
business market and in the super-premium consumer market with
American Express  AXP.N  
    ** Brokerage believes the acquisition could enable COF to
build a mass-market version of AXP by leveraging its large
cardholder base
    ** COF stock jumped 36% in 2024

 (Reporting by Arasu Kannagi Basil in Bengaluru)
 ((ArasuKannagi.Basil@thomsonreuters.com;))