Capital One Earnings Preview

Motley Fool Staff
Updated

Investors are on the edge of their seats, hoping that Capital One (NYS: COF) will top analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Thursday, Oct. 20. Capital One is a financial services company that markets a variety of financial products and services through its banking and non-banking subsidiaries.

What analysts say:

  • Buy, sell, or hold?: Analysts are bullish on this stock with 15 analysts rating it a buy and only one rating it a sell. Analysts like Capital One better than competitor Discover Financial Services overall. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.

  • Revenue forecasts: On average, analysts predict $4.05 billion in revenue this quarter. That would represent a rise of 0.7% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.69 per share. Estimates range from $1.41 to $2.06.

What our community says:
The majority of CAPS All-Stars see Capital One as a good bet, with 63.7% awarding it an "outperform" rating. The majority of the Fools are in agreement with the All-Stars as 63.9% give it an "outperform" rating. Fools have embraced Capital One and haven't been shy with their opinions lately, logging 623 posts in the past 30 days. Capital One's bearish CAPS rating of one out of five stars falls short of the Fool community sentiment.

Management:
Capital One's profit has risen year over year by an average of 74.9% over the past five quarters. Revenue has fallen in the past two quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Net Margin

20.0%

21.6%

15.1%

17.0%

One final thing: If you want to keep tabs on Capital One movements -- and for more analysis on the company -- make sure you add it to your Watchlist.

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At the time thisarticle was published

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