Credit card company Capital One Financial (COF) is branching out a bit, and recently opened a new lounge at the Reagan National Airport in Washington, D.C. But with a new lawsuit also brewing, the opulent airport hangout did little to boost investor spirits.
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The new lounge, known as Capital One Landing, is a co-production between the credit card company and Jose Andres, a Michelin-starred chef, which ensures that high-end cuisine should be on offer. This is the first such lounge opened, though LaGuardia Airport in New York is next in line to get one of these.
Non-cardholders will pay a $90 fee per person per visit. For those balking at the idea of paying to sit in an airport, no matter how nice it is, there is also a free platform available called the “On the Fly” quick-service restaurant.
New Lawsuit
Meanwhile, Capital One is fending off a lawsuit from its former employees over its 401k program. The lawsuit alleges that Capital One violated the Employee Retirement Income Security Act, using forfeited funds as company contributions, rather than as a way to reduce administrative costs.
A report noted that over $42 million in such funds were “improperly steered”, used to enrich the company by letting them hang on to contribution cash instead of being used to take administrative costs off the employees’ backs.
Is Capital One Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on COF stock based on five Buys and eight Holds assigned in the past three months, as indicated by the graphic below. After a 72.63% rally in its share price over the past year, the average COF price target of $177 per share implies 2.57% downside risk.
