Stock Traders Buy High Volume of Call Options on Capital One Financial (NYSE:COF)

Capital One Financial Corporation (NYSE:COF) was the target of some unusual options trading activity on Wednesday. Investors purchased 19,112 call options on the company. This is an increase of 40% compared to the average daily volume of 13,620 call options.

Capital One Financial Trading Down 2.2%

NYSE COF traded down $4.48 during trading hours on Wednesday, hitting $201.74. 4,272,176 shares of the company were exchanged, compared to its average volume of 5,104,396. Capital One Financial has a 52 week low of $174.24 and a 52 week high of $259.64. The company has a quick ratio of 1.03, a current ratio of 1.03 and a debt-to-equity ratio of 0.46. The stock has a 50-day moving average price of $194.38 and a 200 day moving average price of $201.17. The stock has a market cap of $125.54 billion, a PE ratio of 70.79, a price-to-earnings-growth ratio of 0.75 and a beta of 1.02.

Capital One Financial (NYSE:COF) last announced its earnings results on Tuesday, July 21st. The financial services provider reported $5.81 EPS for the quarter, topping analysts’ consensus estimates of $4.67 by $1.14. The firm had revenue of $15.83 billion during the quarter, compared to analysts’ expectations of $15.77 billion. Capital One Financial had a return on equity of 10.59% and a net margin of 4.29%.The company’s quarterly revenue was up 26.9% on a year-over-year basis. During the same quarter in the previous year, the business earned $5.48 EPS. Analysts forecast that Capital One Financial will post 19.54 earnings per share for the current fiscal year.

Capital One Financial Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Monday, June 1st. Shareholders of record on Tuesday, May 19th were paid a dividend of $0.80 per share. This represents a $3.20 annualized dividend and a yield of 1.6%. The ex-dividend date of this dividend was Tuesday, May 19th. Capital One Financial’s payout ratio is presently 112.28%.

Key Stories Impacting Capital One Financial

Here are the key news stories impacting Capital One Financial this week:

• Positive Sentiment: Capital One reported Q2 adjusted EPS of $5.81, ahead of estimates, with revenue of $15.83 billion also slightly above expectations. The company also said the Discover integration is on schedule and that synergies are being captured, which could support longer-term earnings growth. Article Title
• Positive Sentiment: Unusually heavy options activity was seen in COF, with call volume running about 40% above average, suggesting some traders are positioning for a rebound or further upside.
• Neutral Sentiment: Analysts and market commentary highlighted solid top-line growth, stronger net interest income, and lower provisions as key drivers of the quarter, but also noted that the stock’s reaction may depend on whether investors believe those gains are sustainable. Article Title
• Neutral Sentiment: Management’s emphasis on credit performance and Discover-network testing supports the growth story, but investors are still evaluating how much of the earnings beat came from temporary reserve releases versus recurring improvement. Article Title
• Negative Sentiment: The pullback appears tied to concerns that Q2 profit was helped by a drop in credit-loss provisioning and a $662 million reserve release, while net charge-offs remained elevated at $3.6 billion. That makes the beat look less durable to some investors. Article Title
• Negative Sentiment: Expenses also remain a concern: acquisition amortization and Discover/Brex integration costs pushed non-interest expense higher, which could limit near-term margin expansion even after the earnings beat. Article Title

Analyst Ratings Changes

Several brokerages have recently issued reports on COF. Royal Bank Of Canada reduced their target price on Capital One Financial from $275.00 to $235.00 and set a “sector perform” rating on the stock in a report on Friday, April 10th. Argus dropped their price target on Capital One Financial from $260.00 to $250.00 and set a “buy” rating for the company in a research note on Thursday, April 23rd. The Goldman Sachs Group cut their price target on Capital One Financial from $300.00 to $260.00 and set a “buy” rating for the company in a report on Tuesday, April 7th. Barclays reduced their price objective on Capital One Financial from $242.00 to $240.00 and set an “overweight” rating on the stock in a research note on Wednesday. Finally, TD Cowen decreased their price objective on Capital One Financial from $260.00 to $253.00 and set a “buy” rating on the stock in a report on Tuesday, July 7th. Twenty equities research analysts have rated the stock with a Buy rating and four have given a Hold rating to the company’s stock. According to data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and an average target price of $259.82.

Insider Buying and Selling

In other news, insider Celia Karam sold 1,749 shares of Capital One Financial stock in a transaction that occurred on Friday, May 1st. The shares were sold at an average price of $192.58, for a total transaction of $336,822.42. Following the sale, the insider owned 61,579 shares in the company, valued at $11,858,883.82. This trade represents a 2.76% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, General Counsel Matthew W. Cooper sold 3,500 shares of the business’s stock in a transaction on Tuesday, July 7th. The stock was sold at an average price of $208.00, for a total transaction of $728,000.00. Following the completion of the transaction, the general counsel directly owned 90,194 shares in the company, valued at $18,760,352. This trade represents a 3.74% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders have sold 8,749 shares of company stock valued at $1,708,577. Insiders own 0.78% of the company’s stock.

Institutional Investors Weigh In On Capital One Financial

Several hedge funds and other institutional investors have recently made changes to their positions in COF. Vanguard Group Inc. grew its holdings in Capital One Financial by 0.6% during the 4th quarter. Vanguard Group Inc. now owns 56,897,238 shares of the financial services provider’s stock valued at $13,789,615,000 after purchasing an additional 360,071 shares during the last quarter. Franklin Resources Inc. lifted its stake in Capital One Financial by 5.4% in the fourth quarter. Franklin Resources Inc. now owns 12,476,462 shares of the financial services provider’s stock worth $3,023,795,000 after purchasing an additional 638,158 shares during the last quarter. Morgan Stanley boosted its position in shares of Capital One Financial by 3.9% during the fourth quarter. Morgan Stanley now owns 8,677,981 shares of the financial services provider’s stock valued at $2,103,196,000 after buying an additional 323,350 shares during the period. Norges Bank purchased a new position in shares of Capital One Financial during the fourth quarter valued at approximately $2,089,803,000. Finally, Davis Selected Advisers grew its stake in shares of Capital One Financial by 2.8% during the fourth quarter. Davis Selected Advisers now owns 8,614,766 shares of the financial services provider’s stock valued at $2,087,878,000 after buying an additional 234,649 shares during the last quarter. Hedge funds and other institutional investors own 89.84% of the company’s stock.

Capital One Financial Company Profile

Capital One Financial Corporation (NYSE: COF) is a diversified bank holding company headquartered in McLean, Virginia. The company’s core businesses include credit card lending, consumer and commercial banking, and auto finance. Capital One issues a wide range of credit card products for consumers and small businesses, and it operates deposit and digital banking services aimed at retail customers and small to midsize enterprises.

Products and services include credit and charge cards, checking and savings accounts (including the online-focused Capital One 360 platform), auto loans, and commercial lending solutions.