How much is Capital worth it if it completes a smash hit merger of Discover Financial Services? According to one Wall Street company, the answer is much more. In news in Tuesday’s memo, BTIG analysts said they believe Capital One shares are worth $427 each if the discovery transaction is completed. Analysts put the stock on the same memo and then upgraded to a buy rating. “We believe Capital One has a significant profitability as it fully utilizes Discover’s network and captures market share in the credit card space of Prime Transactors,” the analyst wrote. “It’s been a long time [Discover] The discovered investor bull case has diamonds that are not polished in the payment network. Analysts argued that Capital’s technology capabilities will help the network compete better with rival operators Visa and Mastercard. Even though BTIG is still on its own, it’s upside down for the main reasons the company has accumulated since BTIG was announced in February, and the decision to tighten its underwriting standards several years ago was clever and improved competitive positioning such as American Express and Ally Financial. Capital One shares rose almost 1% on Tuesday. The optimistic call of BTIG, a large photo of COF YTD Mountain Capital One Financial (COF) annual performance, arrives about a week after capital stocks have fallen, in response to an unconfirmed report on the Department of Justice’s thinking about the merger of one of the capital’s capitals. The report specifically states that DOJ is concerned about the concentration of combined entities in the subprime credit cart market. In response, a Capital One spokesman told CNBC that the transaction “remained well positioned for approval” and fulfilled all legal requirements. City, KBW and Jeffries all came to defend their stock last week. Analysts at each company still hope that the transaction will be completed. Capital One shares rebounded from their initial sale on March 17th, trading above $182 on Tuesday. It has risen nearly 6% since March 14th, surpassing both the S&P 500 and its stretch financial sector. The anti-last debate also violates the context of the legal battle between Capital One and President Donald Trump’s family business. The Trump organization filed a lawsuit against credit card lenders on March 7, claiming that Capital One violated the Consumer Protection Act by closing its account in the aftermath of the January 6, 2021 attack on the U.S. Capitol. Capital One has said it will not close customer accounts for political reasons. In conclusion, we are very bullish about Capital One – even if we don’t abandon the estimate of what the stock is worth after discovery, as BTIG discovered at the $427 figure. The current price target of $210 per share is pretty close to the company’s standalone target. The pending discovery transaction is the main reason it first launched its position at Capital One earlier this month. If completed, Capital One can shift some of the transactions to Discover’s Payments Network and reduce what they pay for MasterCard and Visa. “We tell people to keep this,” Jim Kramer said at a meeting Tuesday morning. Even as an independent player, it is encouraging to see Btig’s positivity towards Capital One, but our belief is that the acquisition of discovery takes place. Capital One CEO Richard Fairbank will do whatever it takes to appease regulators if there are actually antitrust concerns. One compromise includes the possibility of selling a subprime portfolio of discoveries. “They were able to sell some of their business. The deal is still very compromised, so it makes sense to do what they can to make a deal.” (Jim Cramer’s Charitable Trust is a long COF. See here for a full list of stocks.) As a subscriber to Jim Cramer and CNBC Investing Club, Jim receives a trade warning before he makes a deal. Jim waits 45 minutes after sending a trade alert before purchasing or selling stocks in the Charitable Trust portfolio. If Jim talks about stocks on CNBC TV, he will wait 72 hours after issuing a trade alert before running the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with the disclaimer. Due to receiving information provided in connection with the Investment Club, there is no obligation or obligation of the fiduciary. No specific outcomes or benefits are guaranteed.
Screens will display capital 1 logo and trading information financially and discover finance as traders work on the floor on February 20, 2024 at the New York Stock Exchange.
Brendan McDermid | Reuters
