Capital One upgraded to Buy from Neutral at BTIG

BTIG upgraded Capital One (COF) to Buy from Neutral with a $208 price target. If the merger fails between Capital One and Discover (DFS), the analyst thinks Capital One shares are worth $208 and the firm’s current price target reflects that view. However, if the merger does go through, the firm thinks Capital One shares are worth $427, the analyst tells investors. The firm’s positive view of Capital One regardless of the merger outcome relies primarily on the significant excess capital that Capital One has built up since the merger was announced, explains the analyst, who calculates the company holds $13.1B in excess capital. Whether or not the merger goes through, the firm thinks Capital One has been under-earning over the past two years as the merger has increased regulatory scrutiny and expenses, the analyst added.