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Capital One (COF) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Capital One (COF - Free Report) closed at $145.10, marking a +0.95% move from the previous day. This change outpaced the S&P 500's 0.62% gain on the day. Meanwhile, the Dow gained 0.55%, and the Nasdaq, a tech-heavy index, lost 0.03%.

Prior to today's trading, shares of the credit card issuer and bank had lost 6.9% over the past month. This has lagged the Finance sector's loss of 1.47% and the S&P 500's gain of 0.87% in that time.

Investors will be hoping for strength from Capital One as it approaches its next earnings release. In that report, analysts expect Capital One to post earnings of $5.16 per share. This would mark a year-over-year decline of 2.46%. Meanwhile, our latest consensus estimate is calling for revenue of $7.87 billion, up 7.21% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $26.63 per share and revenue of $30.16 billion. These totals would mark changes of +413.1% and +5.72%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Capital One. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.5% higher. Capital One currently has a Zacks Rank of #3 (Hold).

Investors should also note Capital One's current valuation metrics, including its Forward P/E ratio of 5.45. Its industry sports an average Forward P/E of 5.67, so we one might conclude that Capital One is trading at a discount comparatively.

Also, we should mention that COF has a PEG ratio of 0.26. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. COF's industry had an average PEG ratio of 0.26 as of yesterday's close.

The Financial - Consumer Loans industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 105, which puts it in the top 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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