Evercore ISI reduced its price target on Capital One Financial (COF) to $265.00 from $290.00 while retaining an Outperform rating following the bank's fourth-quarter results and the announcement that it will acquire Brex. At the time of Evercore's note, Capital One shares traded at $220.18 and carried a price-to-earnings multiple of 66.04, a level Evercore noted is well above many industry peers.
The firm adjusted its earnings-per-share projections for the company, lowering 2026 EPS to $18.87 from $19.26 and trimming 2027 EPS to $22.83 from $23.32. Those revisions incorporate an assumed third-quarter 2026 close of the Brex acquisition and the related capital effects. Evercore models that the deal will produce roughly 5% tangible book value dilution and approximately 1% core EPS dilution stemming from share issuance tied to the transaction.
Evercore also highlighted the short-term headwinds it expects as Capital One integrates Brex into its payments franchise and continues investment in the Discover Financial Services network. The firm projects a total efficiency ratio around 51.7% in 2026 and about 51.2% in 2027, compared with roughly 50% in the second half of 2025, signalling an anticipated near-term uptick in expense pressure as the bank scales combined operations.
Despite those near-term challenges, Evercore pointed to management's stated focus on disciplined capital allocation and persistent earnings power after the Discover integration as reasons to maintain a constructive stance. The firm framed the Brex deal as a meaningful step that could help Capital One compete more effectively with American Express in certain segments of the payments market.
Operational performance cited in the research note included a strong top-line trajectory. InvestingPro data referenced by Evercore shows Capital One delivered revenue growth of 19.65% over the last twelve months, and InvestingPro projects net income expansion for the firm this year. At the same time, Evercore's revised $265 price objective reflects a valuation of 11.6 times its 2027 EPS estimate.
For context, Evercore compared that multiple against peers: 18 times for American Express, about 23 times for Visa and Mastercard, and 10.2 times for card peers. Analyst targets for Capital One span a range from $216 to $310, while InvestingPro's Fair Value model suggests the stock is currently trading above its fair value.
Capital preservation attributes were also noted. The company has maintained dividend payments for 31 consecutive years, which Evercore and other observers view as a form of stability for investors amid recent share-price moves. The stock had a -3.73% return over the prior week.
In related corporate results, Capital One reported mixed fourth-quarter 2025 figures. GAAP earnings per share came in at $3.86, below the consensus expectation of $4.17, representing a 7.43% negative surprise. Revenue topped estimates, reaching $15.6 billion versus the anticipated $15.47 billion.
Market reaction to the acquisition announcement also prompted further analyst repositioning. BTIG lowered its price target on the company to $270 from $308, citing near-term dilution and an expected slowdown in share repurchases. Wolfe Research trimmed its target to $280 from $294, reflecting higher anticipated marketing and operating expenses tied to the deal. Conversely, Argus preserved a Buy rating, pointing to growth in average loans and improvements in net interest margins.
Taken together, these updates underscore a dynamic period for Capital One as the firm weathers immediate integration costs and near-term dilution while aiming to strengthen its payments positioning. Evercore's adjustments signal tempered near-term earnings visibility but stop short of altering the firm's positive rating on the shares.
Clear summary
Evercore ISI lowered Capital One's price target to $265 from $290 and cut 2026 and 2027 EPS estimates to $18.87 and $22.83 respectively, reflecting an assumed Brex close in third-quarter 2026 and projected tangible book and EPS dilution. Evercore expects higher near-term expenses as Capital One integrates Brex and continues investments in the Discover network, but retained an Outperform rating, citing management's capital discipline and ongoing earnings power.
Key points
- Evercore reduced Capital One's price target to $265 while keeping an Outperform rating.
- 2026 and 2027 EPS were cut to $18.87 and $22.83; model assumes a Q3 2026 Brex close with ~5% tangible book dilution and ~1% core EPS dilution from share issuance.
- Projected efficiency ratios are about 51.7% in 2026 and 51.2% in 2027 versus ~50% in H2 2025, reflecting integration and investment-related expense pressure.
Risks and uncertainties
- Near-term expense pressure during Brex integration and Discover network investments could weigh on operating efficiency - impacting banking and payments sectors.
- Tangible book and core EPS dilution tied to the Brex transaction may compress capital metrics and shareholder returns in the short run - relevant to equity investors and credit markets.
- Analyst estimates and price targets vary widely, and InvestingPro's Fair Value model suggests the shares may be overvalued at current levels - posing valuation risk for equity market participants.