** Capital One Financial COF.N reported a rise in second-quarter adjusted profit on Tuesday, as the consumer lender was helped by a boost in interest income on its credit card debt and higher fee income
** Capital One became the biggest U.S. credit card issuer by balances after its acquisition of Discover Financial was completed midway through the second quarter, following more than a year of regulatory to-and-fro
** Shares of COF were up 4% premarket
STRONG BALANCE SHEET AND RETURN POTENTIAL
** Jefferies ("buy," PT: $255) says the balance sheet remained a strength, allowing for capital return opportunities in the future
** Brokerage estimates that there will be continued earnings accretion and upside to NIM (net interest margin) and ROTCE (return on tangible common equity) as the synergies are phased in
** BofA Global Research ("buy," PO: $244) says "while there is a lot of noise in 2Q reporting from acquisition integration costs, the overall story remains compelling"
** BofA thinks the capital return potential is "quite attractive"
** Morgan Stanley ("overweight," PT: $261) sees a meaningful ramp in buybacks later this year
** Morningstar (fair value: $187) still sees some economic uncertainty, but existing consumer trends are favorable for Capital One and its peers
(Reporting by Joel Jose in Bengaluru)
((joeljose@thomsonreuters.com))
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