Capital One upgraded to Buy from Neutral at UBS

UBS upgraded Capital One (COF) to Buy from Neutral with a price target of $235, up from $168. With Discover (DFS), Capital One (COF) can leverage credit and debit networks to generate revenues without taking balance sheet or credit risk, and to lower the company’s natural cost of funding, driving synergies well beyond what is typical in bank mergers, the analyst tells investors in a research note. The firm says Capital One does not appear to be pricing in the deal, likely due to heightened uncertainty of the deal close, but the change in administration has increased the probability of close and UBS sees the deal closing in 2Q25. UBS views the deal as pro-competitive, allowing Capital One to compete more effectively with Visa (V) and Mastercard (MA), as well as JPMorgan (JPM), Bank of America (BAC), and Wells Fargo (WFC).