COF Should I Buy
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Capital One Financial Corp (COF) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has demonstrated strong financial performance in Q4 2025 and has positive analyst sentiment, the technical indicators, options data, and recent political and regulatory developments suggest caution. The stock's recent price decline, coupled with potential regulatory risks from proposed credit card interest rate caps, makes it prudent to wait for more clarity or a better entry point.
The MACD is negatively expanding (-0.952), indicating bearish momentum. RSI is at 22.818, suggesting oversold conditions but not signaling a clear reversal. Moving averages are converging, and the stock is trading near its support level (S2: 202.941), which could act as a temporary floor. However, no strong bullish signals are present.
Strong Q4 2025 financial performance with revenue up 54.22% YoY and net income up 101.27% YoY.
Analysts remain largely positive, with multiple Buy and Overweight ratings, citing the strategic merit of the Brex acquisition and improving credit quality.
Congress trading data shows significant purchase transactions, indicating some confidence in the stock.
President Trump's proposal to cap credit card interest rates at 10% could negatively impact revenue for credit card issuers like Capital One.
Technical indicators are bearish, with no clear reversal signals.
Options data reflects bearish sentiment, with a high Put-Call Ratio and elevated implied volatility.
Recent price target reductions by analysts reflect concerns over higher expenses and dilution from the Brex acquisition.
Capital One delivered strong Q4 2025 results, with revenue increasing by 54.22% YoY to $15.1 billion and net income up 101.27% YoY to $2.057 billion. EPS also rose by 22.10% YoY to $3.26, demonstrating robust growth.
Analysts maintain a generally positive outlook, with multiple Buy and Overweight ratings. However, recent price target reductions (e.g., Truist to $275 from $290, Barclays to $287 from $294) reflect concerns about higher expenses and dilution from the Brex acquisition. The long-term strategic value of the Brex deal is acknowledged, but near-term challenges are noted.
