Capital One Stock Gained 12% In One Week

Capital One’s stock (NYSE: COF) increased 11.5% in the last week, significantly outperforming the S&P 500 (up 1.5%). Further, the same trend was observed over the last ten days (14.8% 2.1%) and one month (28.4% vs 5.9%). 

Credit card issuers (Discover Financial, American Express, and Capital One) have seen strong growth in their stock price over the last month period. This was due to an improvement in net interest income and consumer spending levels. The net interest income benefited from higher interest rates and growth in outstanding loan balances. 

Capital One posted total revenues of $9.04 billion in the fourth quarter – up 11% y-o-y, driven by a 12% rise in net interest income and a 10% increase in non-interest revenues. Despite positive growth in the top line, it still missed the consensus estimates of earnings due to a significant build-up in provisions for credit losses and higher operating costs. That said, the increase in cost was not unexpected because of difficult macroeconomic conditions.

Now, is COF stock set to rise further, or could we expect some correction? We believe that there is a more than 39% chance of a rise in COF stock over the next month (21 trading days) based on our machine-learning analysis of trends in the stock price over the last ten years. See our analysis on Capital One’s Stock Chance of Rise.

Twenty-One Day: COF 28.4%, vs. S&P500 5.9%; Outperformed market

• Capital One stock gained 28.4% over the last twenty-one trading days (one month), compared to a broader market (S&P500) increase of 5.9%
• A change of 28.4% or more over twenty-one trading days has occurred 8 times in the last ten years.

Ten Day: COF 14.8%, vs. S&P500 2.1%; Outperformed market

• Capital One stock increased 14.8% over the last ten trading days (two weeks), compared to broader market (S&P500) gain of 2.1%
• A change of 14.8% or more over ten trading days has occurred zero times in the last ten years.

Five Day: COF 11.7%, vs. S&P500 1.5%; Outperformed market

• Capital One stock gained 11.7% over a five-day trading period ending 01/31/2022, compared to the broader market (S&P500) increase of 1.5%
• A change of 11.7% or more over five trading days (one week) has occurred zero times in the last ten years
  

Alternate Scenario – Twenty-One Day: COF 20%

(1% likelihood event; 39% probability of rise over next 21 days)

• A change of 20% or more over twenty-one trading days is a 1% likelihood event, which has occurred 33 times in the last ten years
• Of these 33 instances, the stock has seen a positive movement over the next twenty-one trading days on 13 occasions
• This points to a 39% probability for the stock rising over the next twenty-one trading days

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

[1] Month-to-date and year-to-date as of 2/1/2023
[2] Cumulative total returns since the end of 2016

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