Capital One Stock Gets An Evercore ISI Upgrade To ‘Outperform’ — But Retail’s On The Fence

Capital One Financial Corp (COF) shares attracted investor attention Wednesday morning after Evercore ISI upgraded the stock to ‘Outperform’ from ‘In Line’ with an unchanged price target of $200.

Shares of the company rose over 3% on Wednesday morning, coinciding with a broader market rise following softer-than-anticipated consumer inflation in February.

According to a CNBC report, Evercore analyst John Pancari noted that the stock’s valuation does not entirely discount the long-term upside to earnings and returns driven by the combined Capital One-Discover Financial Services franchise.

In February 2024, Capital One announced its intent to acquire Discover Financial Services (DFS) in an all-stock transaction valued at $35.3 billion. The company stated then that Discover shareholders would receive 1.0192 Capital One shares for each Discover share.

Upon consummation of the deal, Capital One shareholders will own approximately 60%, and Discover shareholders will own approximately 40% of the combined company.

“We acknowledge that risks persist - including signs of a weakening U.S. consumer, delay in DFS deal close, potentially higher business investment, and recent COF share outperformance. However, in our view, the shares still offer meaningful upside despite these factors,” the analyst stated.

Evercore has reportedly revised its 2025 and 2026 earnings estimates slightly lower while presenting a more conservative 2027 outlook. However, the analyst expects a compound annual growth rate of 17.7% in earnings per share and a 19.5% return on tangible common equity by 2027, the report stated.

“While a possible delay in DFS deal close and potentially higher network and regulatory/compliance investments pose risk to accretion, our forecasts are notably conservative due to these factors,” the analyst stated.

Despite the positive report, retail sentiment surrounding both stocks remained in the ‘neutral’ territory on Wednesday.

On Tuesday, Baird upgraded Capital One to ‘Outperform' from ‘Neutral’ with a price target of $200, up from $190.

According to TheFly, the brokerage believes the recent weakness in the shares has created an opportunity to "buy a business that should be one of the most profitable risk-adjusted returns in credit-sensitive financials over the next several years."

Capital One shares have lost over 4% in 2025, while Discover Financial Services stock is down over 5% year-to-date.

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