Wolfe Research has lowered the price target for Capital One Financial Corporation (NYSE:COF) to $280.00, down from its previous forecast of $294.00. This adjustment comes while the firm retains its Outperform rating on the stock. The revised target still suggests considerable upside relative to Capital One’s current trading price, which sits at $235.07 and reflects a notably high price-to-earnings ratio of approximately 98 times.
The downgrade in target primarily stems from Wolfe Research’s updated expectations of increased marketing and general operating expenses for Capital One, based on recent commentary from the company. Even with the concern over rising costs, Capital One’s financial outlook remains constructive, as InvestingPro data projects a net income increase this year. Furthermore, sales growth of nearly 95% is forecasted for fiscal year 2025, signaling robust top-line expansion.
Wolfe Research’s revisions include reducing its earnings per share (EPS) estimate for calendar year 2026 to $20.29, down from an earlier projection of $20.80. For 2026, the firm now anticipates marketing expenses to grow by 24%, a significant rise from the prior estimate of 16%, alongside a 15% increase in core operating expenses.
The newly set price target of $280 equates to roughly 11.5 times Wolfe Research’s EPS estimate of $24.89 for 2027, itself lowered from $25.55 in the previous forecast.
Separately, Capital One released its fourth-quarter earnings for 2025, which showed mixed results. The reported EPS of $3.86 missed expectations of $4.17, marking a 7.43% negative surprise. However, revenue slightly beat projections, totaling $15.6 billion versus the forecasted $15.47 billion.
Meanwhile, Capital One’s acquisition of the privately held fintech company Brex has drawn attention from other brokers. BTIG responded by lowering its price target from $308.00 to $270.00 and maintaining a Buy rating. This adjustment factors in expected near-term dilution caused by the acquisition and a likely slowdown in the company’s share repurchase program over the ensuing two years.
BTIG analyst Vincent Caintic also reduced earnings per share estimates for 2026 and 2027 and introduced a novel EPS forecast for 2028. These changes reflect the analyst’s reassessment of Capital One’s financial trajectory given the acquisition and its repercussions on profitability and capital allocation.
Collectively, the adjustments by Wolfe Research and BTIG offer investors a nuanced perspective on Capital One’s current financial performance and future strategic direction, highlighting tensions between growth ambitions and cost management.