Analysts Just Updated Ratings of These 5 Stocks

2. Capital One Financial Corporation (NYSE:COF)

Number of Hedge Fund Holders: 56

Shares of Capital One Financial Corporation (NYSE:COF) rose over five percent on Friday, June 17, 2022, after Baird turned bullish on the bank holding company. The research firm raised its ratings for Capital One Financial Corporation (NYSE:COF) from “Neutral” to “Outperform,” maintaining a price target of $145 per share for the stock.

Baird analyst David George admitted that Capital One Financial Corporation (NYSE:COF) stock has recently come under pressure due to macro concerns. However, George believes those concerns “are more than priced” into the stock as it trades at 15 – 20 percent discount considering key performance metrics like price-to-earnings and sales. He added that the company’s current share price presents a good entry point.

Separately, investment management firm Davis Funds mentioned Capital One Financial Corporation (NYSE:COF) in its fourth-quarter 2021 investor letter published in March. The firm stated:

“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.”