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Capital One (COF) Up 4.4% Since Last Earnings Report: Can It Continue?
COFCapital One(COF) ZACKS·2025-02-20 17:30

Core Viewpoint - Capital One's recent earnings report indicates strong performance with adjusted earnings surpassing estimates, driven by higher net interest income and non-interest income, despite rising expenses [2][5][6] Financial Performance - Q4 2024 adjusted earnings were 3.09pershare,exceedingtheZacksConsensusEstimateof3.09 per share, exceeding the Zacks Consensus Estimate of 2.66 and up from 2.24intheprior−yearquarter[2]−For2024,adjustedearningsreached2.24 in the prior-year quarter [2] - For 2024, adjusted earnings reached 13.96, beating the consensus estimate of 13.53andreflectinga1213.53 and reflecting a 12% year-over-year increase [4] - Total net revenues for Q4 were 10.19 billion, a 7% increase from the prior-year quarter, surpassing the consensus estimate of 10.16billion[5]−For2024,totalnetrevenuesgrew610.16 billion [5] - For 2024, total net revenues grew 6% to 39.1 billion, also exceeding the consensus estimate of 39.08billion[5]IncomeandExpenses−Netinterestincome(NII)increased839.08 billion [5] Income and Expenses - Net interest income (NII) increased 8% year over year to 8.1 billion, with net interest margin (NIM) expanding by 30 basis points to 7.03% [5] - Non-interest income grew 5% to 2.09billion,drivenbyhigherservicechargesandnetinterchangefees[6]−Non−interestexpensesrose72.09 billion, driven by higher service charges and net interchange fees [6] - Non-interest expenses rose 7% year over year to 6.09 billion, attributed to increases in almost all cost components [6] Credit Quality - Provision for credit losses was 2.64billion,down82.64 billion, down 8% from the prior-year quarter [8] - The 30-plus-day-performing delinquency rate decreased by 2 basis points to 3.69%, while the net charge-off rate increased by 38 basis points to 3.59% [8] Capital and Profitability - As of December 31, 2024, the Tier 1 risk-based capital ratio improved to 14.8% from 14.2% a year ago [9] - Return on average assets was 0.90%, up from 0.60% in the year-ago period, and return on average common equity increased to 7.16% from 5.03% [9] Share Repurchase - During the reported quarter, Capital One repurchased 0.88 million shares for 150 million [10] Market Outlook - Estimates for Capital One have trended downward recently, indicating a potential shift in market sentiment [11][13] - The stock currently holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [13]