Citi raises Capital One PT; shares up
** Brokerage Citi raises price target on consumer bank Capital One Financial COF.N stock to $225 from $190, citing credit card issuer Discover Financial DFS.N acquisition payoff
** Citi believes the Discover acquisition is a way to unlock the "long-awaited payoff" after years of investment spends
** We believe the market is underestimating earnings potential post deal close — brokerage
** The brokerage also believes the firm's core trends are strong in terms of a well positioned balance sheet for lower rates and strong fee growth
** COF and DFS announced an all-stock merger valued at $35.3 bln in February 2024, to create a global payments giant
** Nine of 22 brokerages rate the stock "buy" or higher, 11 "hold" and 2 "sell"; their median PT is $184.50 — data compiled by LSEG
** Shares of COF, which rose 2.1% in afternoon trading, have gained nearly 42% YTD; DFS shares are up ~59% YTD
Reporting by Pritam Biswas in Bengaluru
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