Sterne Agee Maintains Neutral, $50 Target on Capital One
Sterne Agee reiterates its Neutral rating and $50 target price on Capital One (NYSE: COF) as fourth quarter posting by the company was below expectations.
Sterne Agee says, "COF reported 4Q11 EPS of $0.88 vs. $1.52 in 4Q10. Results were below our expectations of $1.79 and consensus expectations of $1.56. The lower reported results reflected decreased levels of credit card revenue suppression reversal. Overhead was higher as well due to increased marketing costs, write-down and litigation costs, and accelerating the company's “…top bank infrastructure…” to ensure its readiness to “…execute on attractive acquisition opportunities.” Credit card yields fell from 14.84% in 3Q11 to14.12% and total margins fell 17bps."
COF closed at $48.77 per share on Thursday.
