Capital One Financial's stock price plummeted 5.77% during Friday's intraday trading session, marking a significant decline for the credit-card issuer.
The sharp drop followed the company's fourth-quarter earnings report, which revealed adjusted earnings of $3.86 per share, falling short of analyst expectations that ranged from $4.11 to $4.69 per share. Concurrently, Capital One announced its agreement to acquire financial-technology company Brex for $5.15 billion in a cash and stock transaction, while also raising its credit-loss provisions.
Adding to investor concerns, CEO Richard Fairbank issued warnings about potential regulatory risks, specifically addressing President Trump's proposed 10% cap on credit card interest rates, which he stated could severely restrict consumer credit access and potentially trigger economic repercussions. Multiple analysts responded to these developments by lowering their price targets on Capital One shares.