Latest news with #RichardFairbank
Yahoo
12 hours ago
- Business
- Yahoo
This Stock Is Gunning for ‘Global Domination.' Jim Cramer Says You Should Buy It Now.
In a world where stocks related to high-flying sectors such as artificial intelligence, quantum computing, cybersecurity, and robotics are generating returns that are scarcely believable, betting on a financial stock for 'global domination' seems a bit far-fetched. Yet the popular host of CNBC's Mad Money, Jim Cramer, is doing exactly that with Capital One Financial (COF). Cramer's bullish thesis on the company is based on two key aspects: the recent acquisition of credit card company Discover and the long-serving CEO, Richard Fairbank's, strategic vision. He stated, 'He's going to go for a worldwide card, and I would not go against Richard Fairbank, hence why it is up $10 [a share] off a quarter that is very confusing, but is clearly going in the right direction.' More News from Barchart Tesla Just Signed a Chip Supply Deal with Samsung. What Does That Mean for TSLA Stock? Dear Microsoft Stock Fans, Mark Your Calendars for Aug. 1 Is Lucid Motors Stock a Buy, Sell, or Hold for July 2025? Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. About Capital One Founded in 1994 as a credit card issuer, Capital One has grown to be one of the foremost names in the financial industry, with interests in auto lending, consumer and commercial banking, and online banking, serving retail consumers, small and midsize businesses, and commercial clients. Valued at a market cap of $81.6 billion, COF stock has gained 19.6% on a YTD basis. Notably, the stock also offers a dividend yield of 1.13%, and with a payout ratio of just 12%, the scope for further growth remains. So, is Cramer's optimism about COF stock based on sound rationale, or will the assumptions about its 'global domination' remain just a pipe dream? Let's find out. Financials Gaining Momentum After reporting three consecutive earnings misses in 2024, Capital One has made a turnaround with four consecutive quarters of earnings beats. The latest quarter, Q2 2025, saw the company report adjusted EPS of $5.48. This marked a substantial YOY growth of 74.5%, accompanied by 25% growth in total net revenues to $12.5 billion in the same period. Net interest margin improved to 7.62% from 6.70% in the year-ago period, as the company also improved its capital position, reporting a Common equity Tier 1 capital ratio of 14% compared to 13.2% in the previous year. Average loans and deposits also grew year over year. While average loans held for investment increased to $378.2 billion from $318.2 billion in the corresponding period a year ago, average deposits surged to $414.6 billion from $349.5 billion. The rise in average loan balances was driven by increases in credit card and consumer-banking loans, having end-of-period balances of $269.7 billion (+75.2% YOY) and $81.2 billion (+7.3% YOY), respectively. Meanwhile, total deposits at the end of the quarter stood at $468.1 billion, up 33.2% from the prior year. Capital One Is on the Right Path Since my last piece on Capital One, which followed legendary investor Warren Buffett triming his stake, the stock has gained 14%. The obvious strengths of the Discover acquisition are driving growth, which made Capital One the eighth-largest bank in the United States. Beyond expanding its consumer and commercial banking capabilities, the acquisition gives Capital One a new competitive edge: entry into the payments network arena, an area where Discover already has an established presence. Operationally, things are trending in the right direction too. In the latest quarter, charge-offs totalled $3.1 billion, but crucially, credit card losses improved, falling to 5.2% from 6% in the prior year. Likewise, delinquencies over 30 days dropped to 3.6% from 4.2% a year earlier. Even excluding Discover's metrics, Capital One saw its delinquency rate decline to 3.92%, down 22 basis points year-over-year. These shifts hint at better credit health ahead, assuming macro conditions don't worsen. On the commercial side, nonperforming loan levels also moved lower slightly, from 1.4% to 1.3%. Further, Capital One has also been quietly but consistently betting big on artificial intelligence. The company began working with machine learning tools as far back as the early 2000s. Today, it runs several AI-powered systems, including a smart assistant that helps users compare cars, schedule test drives, and book dealer visits. That assistant has driven a 55% increase in dealer engagement and faster customer interactions. There's also a powerful generative AI solution that supports customer service teams by generating virtual card numbers, replacing lost cards, and resolving complex queries. This tool now produces more relevant responses, improving internal search accuracy from 84% to 93%, and has already been adopted widely across support operations. Capital One's tech stack also includes personalized digital features for roughly 100 million users across its platforms, helping drive better user engagement and faster testing of new features. Analyst Opinions on COF Stock Thus, analysts have given COF stock a 'Strong Buy' rating with a mean target price of $240.24. This indicates upside potential of about 13% from current levels. Out of 22 analysts covering the stock, 15 have a 'Strong Buy' rating, two have a 'Moderate Buy' rating, and five have a 'Hold' rating. On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on 登入存取你的投資組合
Yahoo
2 days ago
- Business
- Yahoo
This Stock Is Gunning for ‘Global Domination.' Jim Cramer Says You Should Buy It Now.
In a world where stocks related to high-flying sectors such as artificial intelligence, quantum computing, cybersecurity, and robotics are generating returns that are scarcely believable, betting on a financial stock for 'global domination' seems a bit far-fetched. Yet the popular host of CNBC's Mad Money, Jim Cramer, is doing exactly that with Capital One Financial (COF). Cramer's bullish thesis on the company is based on two key aspects: the recent acquisition of credit card company Discover and the long-serving CEO, Richard Fairbank's, strategic vision. He stated, 'He's going to go for a worldwide card, and I would not go against Richard Fairbank, hence why it is up $10 [a share] off a quarter that is very confusing, but is clearly going in the right direction.' More News from Barchart Warren Buffett Warns Inflation Turns Business Into 'The Upside-Down World of Alice in Wonderland' But Weeds Out 'Bad Businesses' Why GOOGL Stock May Be the Market's Next Big Winner Alphabet Posts Lower Free Cash Flow and FCF Margins - Is GOOGL Stock Overvalued? Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. About Capital One Founded in 1994 as a credit card issuer, Capital One has grown to be one of the foremost names in the financial industry, with interests in auto lending, consumer and commercial banking, and online banking, serving retail consumers, small and midsize businesses, and commercial clients. Valued at a market cap of $81.6 billion, COF stock has gained 19.6% on a YTD basis. Notably, the stock also offers a dividend yield of 1.13%, and with a payout ratio of just 12%, the scope for further growth remains. So, is Cramer's optimism about COF stock based on sound rationale, or will the assumptions about its 'global domination' remain just a pipe dream? Let's find out. Financials Gaining Momentum After reporting three consecutive earnings misses in 2024, Capital One has made a turnaround with four consecutive quarters of earnings beats. The latest quarter, Q2 2025, saw the company report adjusted EPS of $5.48. This marked a substantial YOY growth of 74.5%, accompanied by 25% growth in total net revenues to $12.5 billion in the same period. Net interest margin improved to 7.62% from 6.70% in the year-ago period, as the company also improved its capital position, reporting a Common equity Tier 1 capital ratio of 14% compared to 13.2% in the previous year. Average loans and deposits also grew year over year. While average loans held for investment increased to $378.2 billion from $318.2 billion in the corresponding period a year ago, average deposits surged to $414.6 billion from $349.5 billion. The rise in average loan balances was driven by increases in credit card and consumer-banking loans, having end-of-period balances of $269.7 billion (+75.2% YOY) and $81.2 billion (+7.3% YOY), respectively. Meanwhile, total deposits at the end of the quarter stood at $468.1 billion, up 33.2% from the prior year. Capital One Is on the Right Path Since my last piece on Capital One, which followed legendary investor Warren Buffett triming his stake, the stock has gained 14%. The obvious strengths of the Discover acquisition are driving growth, which made Capital One the eighth-largest bank in the United States. Beyond expanding its consumer and commercial banking capabilities, the acquisition gives Capital One a new competitive edge: entry into the payments network arena, an area where Discover already has an established presence. Operationally, things are trending in the right direction too. In the latest quarter, charge-offs totalled $3.1 billion, but crucially, credit card losses improved, falling to 5.2% from 6% in the prior year. Likewise, delinquencies over 30 days dropped to 3.6% from 4.2% a year earlier. Even excluding Discover's metrics, Capital One saw its delinquency rate decline to 3.92%, down 22 basis points year-over-year. These shifts hint at better credit health ahead, assuming macro conditions don't worsen. On the commercial side, nonperforming loan levels also moved lower slightly, from 1.4% to 1.3%. Further, Capital One has also been quietly but consistently betting big on artificial intelligence. The company began working with machine learning tools as far back as the early 2000s. Today, it runs several AI-powered systems, including a smart assistant that helps users compare cars, schedule test drives, and book dealer visits. That assistant has driven a 55% increase in dealer engagement and faster customer interactions. There's also a powerful generative AI solution that supports customer service teams by generating virtual card numbers, replacing lost cards, and resolving complex queries. This tool now produces more relevant responses, improving internal search accuracy from 84% to 93%, and has already been adopted widely across support operations. Capital One's tech stack also includes personalized digital features for roughly 100 million users across its platforms, helping drive better user engagement and faster testing of new features. Analyst Opinions on COF Stock Thus, analysts have given COF stock a 'Strong Buy' rating with a mean target price of $240.24. This indicates upside potential of about 13% from current levels. Out of 22 analysts covering the stock, 15 have a 'Strong Buy' rating, two have a 'Moderate Buy' rating, and five have a 'Hold' rating. On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Citigroup enters credit card perk wars with $595 annual fee for Strata Elite
Citigroup (C) is once again courting high-end credit card spenders as it rolls out its new Strata Elite premium card on Sunday with a $595 annual fee. "The modern customer, who is affluent with a passion for travel and dining, told us they want to maximize the rewards they can earn in the categories they care about," Pam Habner, Citigroup's head of US branded cards and lending, said in an interview. Strata Elite joins an increasingly crowded field as the biggest names in finance all chase after the same well-heeled consumers with credit card perks. Last month, JPMorgan Chase (JPM), the largest US credit card issuer by purchase volume, raised the annual fee of its top-tier Chase Sapphire Reserve card to $795 from $550 and loaded it with more perks. The country's second-largest credit card lender, American Express (AXP), also promised a refresh later this year of its higher-end Platinum card that currently comes with a $695 annual fee. Capital One (COF) is also "leaning in hard" with its Venture X rewards card, CEO Richard Fairbank told analysts last week. That card, which launched in 2021, comes with a $395 annual fee and special offers. Big banks dominate the premium US credit card market. With average interest rates above 20%, according to Federal Reserve data in May, credit cards have long been "one of the most attractive areas in consumer banking," CFRA banking analyst Ken Leon said. Habner, who previously launched JPMorgan's Sapphire Reserve card in 2016, said Citigroup's new Strata Elite card will offer customers "the highest earning potential of any card in the market." "They very clearly told us we don't want a card that has a coupon book filled with merchant offers we may or may not use," Habner added. Read more: See which credit cards topped the 2025 Yahoo Finance Awards The rollout of the bank's new premium card comes after Citigroup exited the business of courting wealthy spenders with perks in 2021, when it ceased accepting applications for its premium Prestige card ($495 annual fee). By purchase volume and outstanding credit balances, Citigroup ranks as the country's third-largest credit card lender. Its branded credit card business grew 11% in the second quarter compared with the year-ago period to $2.8 billion. Its smaller retail services card business fell 5% to $1.6 billion. "Part of competing in this space is ensuring that we have innovative products that appeal to the needs and interests of our customers," Citigroup CFO Mark Mason told reporters earlier this month. Citigroup won't be rolling out its own branded airport lounge as part of the Strata Elite. It will, however, offer cardholders "priority pass," a voucher that grants access to 1,000 airport lounges worldwide. JPMorgan's Sapphire Reserve, American Express' Platinum, and Capital One's Venture X all come with the same perk. But Habner said Citigroup aims to offer a wider range of perks with more customization and four passes per year to the American Airlines-owned Admirals Club airport lounge network. In exchange for the annual fee, cardholders get six times points on air travel and 12 times points on hotels, car rentals, and attractions booked on the company's travel platform. Along with 1.5 times points on all other purchases, cardholders will get three times points at restaurants, with that amount doubling to six times points on Friday and Saturday nights. "Our customers are busy," Habner said. "They're living exciting lives, they're change makers, they're traveling the world. They don't want to have to have a math degree and a spreadsheet to try to keep track of their card rewards program." David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. His email is Click here for in-depth analysis of the latest stock market news and events moving stock prices Sign in to access your portfolio
Yahoo
6 days ago
- Business
- Yahoo
Discover costs mount for Capital One
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. Dive Brief: Capital One reported a $4.3 billion second-quarter loss Tuesday, as the bank begins digesting its acquisition of Discover. The McLean, Virginia-based lender – whose assets jumped about 34%, to $659 billion, once the acquisition was completed in the second quarter – said Discover integration costs will surpass the $2.8 billion estimate originally shared, although Capital One CEO Richard Fairbank didn't provide more detail during the bank's second-quarter earnings call. Opportunities the Discover purchase presents are exciting, 'but they will require significant investment to bring them home,' Fairbank said. 'We're very compelled by the opportunities on the other side, but it's very clear to us that it's a multiyear journey and it's going to require quite a bit of investment.' Dive Insight: Although the Discover deal was originally estimated at $35.3 billion when it was announced in February 2024, the fair value purchase consideration was actually $51.8 billion when the deal closed May 18, Capital One disclosed Tuesday. The bank's integration budget includes deal costs, moving Discover onto its technology stack, integrating the Riverwoods, Illinois-based company's products and experiences, added investments in risk management and compliance, and integrating Discover's workforce, Fairbank told analysts during Tuesday's earnings call. 'As we have gotten more granularity on each of these efforts, we expect our integration costs will be somewhat higher than our previously announced $2.8 billion,' Fairbank said. For the first six months of the year, Capital One spent about $409 million on Discover integration expenses. Discover-related expenses in the second quarter totaled $9.4 billion, counting money set aside for some Discover loans. 'As we get deeper into it, it is … coming in somewhat higher,' Fairbank said. 'But it's not in any one thing. It's really just across a variety of the many elements of this deal.' On top of merger integration costs, Capital One CFO Andrew Young noted the bank plans to continue investing, too, including by building out additional capabilities for debit on Discover's network, in part to increase customer engagement. Fairbank stressed that investments in technology will remain a priority for Capital One, which aims to be a 'technology company that does banking.' 'Management noted ongoing investment in tech stack for operational efficiency and marketing / customer experience to remain competitive,' Jefferies analyst John Hecht wrote in a Tuesday note. 'It is clear that [Capital One] is planning on a several-year-journey in investing in the network from several perspectives (brand, technology, etc.).' Capital One also reiterated its expectation of $2.5 billion in deal synergies. 'This quarter reminded me of college physics class - I see the numbers and hear the words but only have a vague grasp of what is actually happening,' Truist Securities analyst Brian Foran wrote in a Tuesday note. Also Tuesday, a judge granted Capital One's request to put evidence-sharing on hold in a lawsuit the Trump Organization has filed against the bank. The lawsuit, filed in March, lodged de-banking accusations against Capital One, saying the lender closed hundreds of Trump-related bank accounts in 2021 because it believed 'the political tide at the moment favored doing so.' In May, Capital One asked the judge to dismiss the lawsuit, saying the Trump Organization's 'generalized allegations' of politically motivated de-banking don't hold up and its claims lack factual or legal support. Tuesday's order halts the discovery or evidence-sharing process until after the judge issues a decision on tossing the lawsuit. Recommended Reading Synapse partner banks hit with lawsuit over fund mismanagement Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
23-07-2025
- Business
- CNBC
Jim Cramer is betting big on a financial stock that is seeking 'global domination'
Capital One stock hit a new record high on Wednesday, and Jim Cramer believes it's not done running yet. Shares of the credit card issuer rose as much as 6.9% Wednesday morning despite a noisy quarterly earnings report Tuesday evening. While shares came off their highs of the session, Capital One's earnings report nevertheless validated Cramer's long-held belief that the financial stock can climb even higher now that its blockbuster $35 billion acquisition of Discover is complete. Capital One is going for "global domination" in the credit card industry, Cramer said on "Squawk on the Street" on Wednesday. Now that it owns Discover's coveted payments network, Capital One is in a position to reduce the amount of fees it pays to Mastercard and Visa and better compete in against American Express the pursuit of high-spending clients. American Express had previously been the only card issuer to own a payments network. Longtime Capital One CEO Richard Fairbank "is going for it," said Cramer, who runs the CNBC Investing Club. Cramer's Charitable Trust, the portfolio used by the Club, took a stake in Capital One in early March. "He's going to go for a worldwide card, and I would not go against Richard Fairbank, hence why it is up $10 [a share] off a quarter that is very confusing, but is clearly going in the right direction." Capital One currently trades around 12 times forward earnings, according to FactSet, while American Express commands a P/E ratio of nearly 19. Cramer argued that as investors realize the benefits of the combined company, that gap should narrow. "The multiple would still go up very big [if it trades closer to American Express's valuation], and that's why this stock is roaring today," he said. Fairbank reiterated the benefits of the Discover deal during Tuesday's earnings call. Capital One now doesn't only issue credit cards, but it can collect fees from its transactions as well. "There are only two banks in the world with their own network, and we are one of them. We are moving to capitalize on this rare and valuable opportunity," he said. The Investing Club has added to its position in Capital One multiple times this year, most recently in May at roughly $186 a share. The Club has a $250 price target on Capital One, implying a more than 15% upside from its Tuesday close.
