Zacks Investment Research downgraded shares of Capital One Financial Corp. (COF) from NEUTRAL to UNDERPERFORM on March 06, 2013, with a target price of $49.00.
We are downgrading our recommendation on Capital One to Underperform to reflect lower-than-expected earnings in the fourth quarter. Results were adversely impacted by increased operating expenses, partially offset by growth in top line. However, strong profitability as well as sturdy capital ratios and improving asset quality were the positives for the quarter. We anticipate continued synergies from the company's geographic diversification and recent acquisitions. Moreover, the resilience exhibited by almost all its businesses will continue to support its financials. Nevertheless, in the near term, rising expenses, exposures to commercial real estate, weak demand for loans and the impact of new financial regulations are expected dent its financials.
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