Bank of America Maintains Buy Rating on Capital One Amid Slower Card Growth
Capital One reported slower growth in its domestic credit card portfolio for July as it continues to integrate Discover, but Bank of America analyst Mihir Bhatia remains optimistic. In a note shared with TheStreet, Bhatia maintained his 'Buy' rating and $253 price target on Capital One (COF), which implies an 11.3% upside from the current share price. While card balances grew at a slower pace compared to June, credit performance remained strong, including a decline in net charge-off rates. BofA noted that domestic card loans rose by 1.92% year-over-year but slowed from June’s growth rate of 2.58%. The analyst expects meaningful acceleration only after the Discover integration and related challenges are resolved. Meanwhile, credit trends improved further with a better-than-historical net charge-off decline in July. Auto lending showed stronger momentum, with auto loan balances rising by over 12% year-over-year. Bhatia cited expense synergies, capital-return potential, and valuation upside as key reasons to maintain confidence in Capital One despite the near-term growth slowdown.
Topics: analyst rating Bank of America Capital One card portfolio growth