Capital One Financial: Shares Could Struggle In 2023


  • Capital One Financial Corporation is one of the financial firms that are highly sensitive to economic trends and monetary policies due to its exposure to subprime borrowers.
  • A 34% drop in its fiscal year 2022 earnings demonstrates that tight market conditions make it difficult for a consumer finance company to generate lofty earnings.
  • COF’s earnings may suffer in the coming quarters as economic uncertainty and interest rate increases could potentially lead to a recession.
  • The recent uptrend in its shares appears to be a bear market rally, as falling earnings and economic headwinds are expected to weigh heavily on its shares in the coming days.

A Capital One branch in Pearland, Texas, USA.

JHVEPhoto/iStock Editorial via Getty Images

In one of the most difficult macroeconomic environments in a decade, Capital One Financial Corporation (NYSE:COF) does not appear to be a good stock to buy. Its stock, which has already lost nearly a quarter of

Average U.S. commercial bank credit card interest rate

Average U.S. commercial bank credit card interest rate (

Capital One's allowances for credit losses

Capital One’s allowances for credit losses (

Credit card delinquency rate

Credit card delinquency rate (fred.stlouisfed)

COF price chart

COF price chart (Seeking Alpha)

Quant ratings

Quant ratings (Seeking Alpha)

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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