Citi raises Capital One PT; shares up

Discover Financial Services

22/11/2024 19:05

** Brokerage Citi raises price target on consumer bank
Capital One Financial  COF.N  stock to $225 from $190, citing
credit card issuer Discover Financial  DFS.N  acquisition payoff
    ** Citi believes the Discover acquisition is a way to unlock
the "long-awaited payoff" after years of investment spends  
    ** We believe the market is underestimating earnings
potential post deal close — brokerage 
    ** The brokerage also believes the firm's core trends are
strong in terms of a well positioned balance sheet for lower
rates and strong fee growth 
    ** COF and DFS announced an all-stock merger valued at $35.3
bln in February 2024, to create a global payments giant  
    ** Nine of 22 brokerages rate the stock "buy" or higher, 11
"hold" and 2 "sell"; their median PT is $184.50 — data compiled
by LSEG
    ** Shares of COF, which rose 2.1% in afternoon trading, have
gained nearly 42% YTD; DFS shares are up ~59% YTD 

 (Reporting by Pritam Biswas in Bengaluru)
 ((Pritam.Biswas@thomsonreuters.com))