Capital One Stock On Watch After Upbeat Q4 Earnings, Retail’s Optimistic
The lender’s fourth-quarter net interest margin fell eight basis points to 7.03% compared with the previous quarter.
FollowCapital One Financial Corp (COF) drew retail attention on Wednesday after topping Wall Street estimates for quarterly profit.
On Tuesday, the company reported an adjusted net income of $3.09 per share, compared with the average analysts’ estimate of $2.80 per share, according to Koyfin data.
Its fourth-quarter revenue of $10.19 billion fell slightly short of the market estimates.
The company said its net interest income (NII) rose 8% to $8.10 billion compared to last year, helped by a rise in credit card period-end loans.
“Our fourth quarter results included steady top-line growth in our domestic card business, strong originations and a return to loan growth in our auto business, and stable credit results across our businesses,” said CEO Richard D. Fairbank.
The company, which held about $362.7 billion in deposits as of Dec. 31, said that the interest-bearing deposits rate paid fell by 18 basis points to 3.45% sequentially.
However, its fourth-quarter net interest margin fell eight basis points to 7.03% compared with the previous quarter.
The Mclean, Virginia-based company said its provision for credit losses rose by $160 million to $2.6 billion, sequentially.
Capital One’s shares were down 0.4% in pre-market trade on Wednesday.
Retail chatter on Stocktwits jumped to ‘extremely bullish’ (75/100) territory from ‘bullish’(56/100) a day ago, while retail chatter soared to ‘extremely high.’
COF’s Sentiment Meter and Message Volume as of 08:28 a.m. ET on Jan. 22, 2025 | Source: Stocktwits
One user expected that stock to hit a fresh all-time high.
However, some users thought the fourth-quarter results were not good enough for the stock to remain at an all-time high.
Capital One was sued by the U.S. Consumer Financial Protection Bureau (CFPB) last week. It alleged that the company cheated millions of consumers out of more than $2 billion in interest.
The firm had denied the claims.
Over the past year, the stock has gained 8.1%.
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