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Capital One (COF) closed at $160.56 in the latest trading session, marking a -0.5% move from the prior day. This change lagged the S&P 500’s 0.08% gain on the day. At the same time, the Dow lost 0.56%, and the tech-heavy Nasdaq lost 0.42%.
Prior to today’s trading, shares of the credit card issuer and bank had gained 9.02% over the past month. This has outpaced the Finance sector’s gain of 5.73% and the S&P 500’s gain of 0.22% in that time.
Investors will be hoping for strength from Capital One as it approaches its next earnings release, which is expected to be January 25, 2022. In that report, analysts expect Capital One to post earnings of $5.11 per share. This would mark a year-over-year decline of 3.4%. Meanwhile, our latest consensus estimate is calling for revenue of $7.92 billion, up 7.91% from the prior-year quarter.
Investors might also notice recent changes to analyst estimates for Capital One. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1% higher. Capital One is holding a Zacks Rank of #2 (Buy) right now.
Looking at its valuation, Capital One is holding a Forward P/E ratio of 8.26. For comparison, its industry has an average Forward P/E of 8.06, which means Capital One is trading at a premium to the group.
Investors should also note that COF has a PEG ratio of 0.39 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. COF’s industry had an average PEG ratio of 0.41 as of yesterday’s close.
The Financial – Consumer Loans industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 64, which puts it in the top 26% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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