Analysts Just Trimmed Their Price Targets of These 5 Stocks

2. Capital One Financial Corporation (NYSE:COF)

Number of Hedge Fund Holders: 56

Morgan Stanley decreased its price target for Capital One Financial Corporation (NYSE:COF) from $152 per share to $126 per share on Tuesday, July 12, 2022. Morgan Stanley analyst Betsy Graseck also downgraded Capital One Financial Corporation (NYSE:COF) from “Overweight” to “Equal Weight,” citing increasing recession risk. In addition, Graseck expects a drop in consumer spending amid record inflation.

Separately, Capital One Financial Corporation (NYSE:COF) appeared in the fourth-quarter 2021 investor letter of investment management firm Davis Funds. The firm said:

“The absolute level of revenues and profits generated by such companies is in fact so large that most of the major financial holdings in the portfolio produce enough annual operating income individually that a number of them could, in theory, purchase several entire businesses among hundreds of choices within the S&P 1500 Index, using just a year’s cash earnings without dipping into capital. This is theoretical, as financial companies would not be in the business of buying healthcare or technology companies, for example, but we point out these facts to illustrate the sheer scale of the economics produced by single financial companies in a given year, which is often a multiple of the cash earnings yielded by companies in a host of other industries.

Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund includes Capital One Financial.”