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- Price
- $198.58
- Discount category
- Close to intrinsic value
- Next earnings
- 2027-01-21
- Next earnings is estimate
- Yes
- Company name
- Capital One
- Sector
- Consumer finance
- About
- Capital One is a U.S. bank holding company and one of the largest credit card lenders in the United States. It also makes auto loans, takes retail deposits, lends to businesses and runs a payments network, which it got when it bought Discover Financial Services in May 2025. It has three segments: Credit Card, Consumer Banking and Commercial Banking. In April 2026, it bought Brex, which sells corporate cards and spend management software to businesses. At September 30, 2026, it had total assets of $672.9 billion, deposits of $480.7 billion and loans held for investment of $462.5 billion. Of these loans, credit card loans were $276.4 billion, consumer banking loans $94.0 billion and commercial banking loans $92.1 billion. Total net revenue was $16.3 billion in Q3 2026. It operates in the United States, Canada and the United Kingdom. Its founder, Richard D. Fairbank, is chairman and chief executive officer, and its shares trade on the New York Stock Exchange.
- Thesis
- The market doubts that Capital One can keep its higher returns after two large deals and while credit card rules are under political pressure. The company bought Discover in May 2025 and Brex in April 2026, and it still pays integration costs: $385 million before tax in Q3 2026. In January 2026, the U.S. President called for a one-year cap of 10% on credit card interest rates, according to press reports, and bills for a cap are in Congress. A cap would cut the income from card loans, which are about 60% of all loans. Credit losses are the other doubt, because card losses rise fast in a recession. For the gap to close, four things must be true. Credit must stay stable: the net charge-off rate was 2.73% in Q3 2026, down from 3.16% a year earlier. The Discover integration must deliver its synergies, with the adjusted efficiency ratio staying near the 48.76% of Q3 2026. Buybacks must continue: the company bought back $7.9 billion of stock in the first nine months of 2026 and kept a CET1 ratio of 13.8%. No cap on card interest rates may become law. The Q4 2026 report, expected around January 21, 2027, gives the next test. If these checks pass, the gap can close within one to two years.
- Risks
- Credit card loans were $276.4 billion at September 30, 2026, about 60% of all loans. In a recession, card charge-offs rise fast, and the company must add to its loan reserves. In January 2026, the U.S. President called for a one-year cap of 10% on credit card interest rates, according to press reports, and bills for a cap are in Congress. A cap or new rules on card fees would cut revenue. The company is still integrating Discover, including the move of its cards to the Discover network, and now Brex. Integration expenses were $385 million before tax in Q3 2026. Delays or weak synergies can keep costs high. Lower interest rates can lower the net interest margin, which was 8.41% in Q3 2026, because loan yields can fall faster than deposit rates.
- Balance sheet
- Capital One is a bank, so its balance sheet is mostly loans and deposits. At September 30, 2026, total assets were $672.9 billion, loans held for investment were $462.5 billion and deposits were $480.7 billion, so deposits funded all loans. The rate paid on interest-bearing deposits was 2.94% in Q3 2026. Senior and subordinated notes were $36.3 billion and securitized debt was $11.3 billion. Liquidity reserves were $205.9 billion. The CET1 ratio was 13.8% (preliminary). Tangible common equity was $61.8 billion, or $102.72 per share on 601.5 million shares. The allowance for credit losses was 4.92% of loans, and the net charge-off rate was 2.73% in Q3 2026. In the first nine months of 2026, the company bought back $7.9 billion of stock under a $16 billion authorization from October 2025 and paid $1.5 billion of common dividends. In September 2026, it redeemed $1.0 billion of Series M preferred stock and sold €1.5 billion of senior notes. As of 2026-09-30.
- Checkpoints
- Jan 21, 2027 (estimate): Q4 2026 results: credit and buybacks. Pending. Watch: A stable or lower net charge-off rate, an adjusted efficiency ratio near 49% and continued buybacks pass; a jump in charge-offs or a reserve build fails.
- Recent events
- 2026-10-20: Capital One reported Q3 2026 results. Net income was $3.5 billion, or $5.61 per diluted share, and $6.69 per share without adjusting items. Total net revenue rose 3% from Q2 to $16.3 billion, and the net interest margin rose to 8.41%. Net charge-offs were $3.1 billion, and the company released $225 million of loan reserves. The CET1 ratio was 13.8%. 2026-09-15: Capital One sold €750 million of 4.326% fixed-to-floating rate senior notes due 2032 and €750 million of 4.832% fixed-to-floating rate senior notes due 2037. 2026-09-01: Capital One redeemed all one million shares of its Series M preferred stock at $1,000 per share. 2026-07-21: Capital One reported Q2 2026 results. Net income was $3.0 billion, or $4.73 per diluted share, and $5.81 per share without adjusting items. The results included $96 million of Brex integration expenses. 2026-04-21: Capital One reported Q1 2026 results. Net income was $2.2 billion, or $3.34 per diluted share, and $4.42 per share without adjusting items. Marketing expenses fell 23% from Q4 2025. 2026-04-07: Capital One completed the purchase of Brex. It paid about $4.5 billion: $2.6 billion in cash and 10.6 million shares of common stock with a fair value of $1.9 billion. Brex is part of the Domestic Card business. 2026-01-22: Capital One reported Q4 2025 results, with net income of $2.1 billion, or $3.26 per diluted share, and $3.86 per share without adjusting items. On the same day, it agreed to buy Brex in a cash and stock deal valued at $5.15 billion.