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Key Points in This Article: Credit card delinquencies hit 12.3% in Q2 2025, near the 2011 all-time high of 13.7%.
Capital One is down 4.9% in a month despite a strong balance sheet and its recent big acquisition. Is this a buy-the-dip moment?
Capital One's acquisition of Discover creates a powerful card issuer and payment processor, positioning the company for strong future shareholder returns. Despite one-time acquisition impacts, adjusted earnings and net interest margins remain robust with a single-digit P/E and growing deposits and loans. The company boasts strong reserves, high liquidity coverage, and a CET1 ratio of 14%, ensuring financial stability and resilience against downturns.
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Capital One's Discover acquisition boosts scale and net interest margin, but brings higher credit risk and integration noise to near-term results. Q2 earnings beat estimates, but the GAAP loss reflects conservative reserves for Discover loans; credit metrics are improving, supporting a stable outlook. Capital levels are robust, with $10B excess capital likely fueling accelerated buybacks once integration stabilizes, potentially starting in 2026.
While Capital One wasn't able to raise its full-year guidance after crushing Q2 EPS expectations, reconfirming its outlook was still a meaningful sign that the acquisition of Discover Financial Services is paying off.
Capital One tops Q2 earnings estimates as the Discover deal boosts card loans, NII and fee income.
Capital One stock jumps 4% after Q2 earnings crush estimates. The Discover deal lifts NII and fee income despite rising costs and provisions.
Capital One Financial Corporation (NYSE:COF ) Q2 2025 Earnings Conference Call July 22, 2025 5:00 PM ET Company Participants Jeff Norris - Senior Vice President of Finance Richard Fairbank - Founder, Chairman, CEO & President Andrew Young - Chief Financial Officer Conference Call Participants Terry Ma - Barclays Bank PLC, Research Division Richard Shane - JPMorgan Chase & Co, Research Division Sanjay Sakhrani - Keefe, Bruyette, & Woods, Inc., Research Division Ryan Nash - Goldman Sachs Group, Inc., Research Division L. Erika Penala - UBS Investment Bank, Research Division Moshe Orenbuch - TD Cowen, Research Division Donald Fandetti - Wells Fargo Securities, LLC, Research Division John Pancari - Evercore ISI Institutional Equities, Research Division Jeffrey Adelson - Morgan Stanley, Research Division Brian Foran - Truist Securities, Inc., Research Division John Hecht - Jefferies LLC, Research Division Operator Good day, and thank you for standing by.
The acquisition of Discover Financial is in the rearview mirror, having been completed in May. For Capital One, the focus is on building scale with the combined entities and on building out a national banking brand.
The headline numbers for Capital One (COF) give insight into how the company performed in the quarter ended June 2025, but it may be worthwhile to compare some of its key metrics to Wall Street estimates and the year-ago actuals.