Capital One Draws Fresh Buy Calls as Discover Deal Fuels Bullish Case

Overview

• UBS on November 20 maintained a Buy rating with a $270 price target, saying its HOLT analysis shows the market pricing in little to no cash-flow ROE improvement from the Discover acquisition.
• Bank of America’s Mihir Bhatia on November 18 reaffirmed a Buy with a $248 target, citing stable credit performance despite acknowledged volatility in credit metrics.
• Wolfe Research on October 22 lifted its price target to $262 and kept an Outperform rating, reinforcing the positive analyst stance.
• Jim Cramer highlighted the Discover deal’s scale and potential merchant cost advantage versus Visa and Mastercard, noting roughly 160 million cards in circulation and a stock valuation near 10 times earnings.
• Coverage underscores expected synergies and network scale as key drivers of the bullish view, while continuing to flag the risk of credit-metric swings.