Capital One (COF) Sees Discover Acquisition as Aligned with its Core Vision

Capital One Financial Corporation (NYSE:COF) is one of the 10 cheap Jim Cramer stocks to invest in. During the Morgan Stanley U.S. Financials Conference in June, the company’s CEO, Richard Fairbank, while marking the completion of the largest banking transaction since the global financial crisis, remarked that the company is not actively pursuing a strategy of acquiring numerous banks.

He noted that most banks tend to expand by purchasing others and acknowledged that Capital One Corporation (NYSE:COF) did go through a period when it acquired banks, but the objective then was to shift its funding structure away from capital markets and toward FDIC-insured deposits. Fairbank stated that the phase has concluded. He described the Discover acquisition as a distinct opportunity that aligns more closely with what he considers an organic path of growth.

According to TipRanks, on June 5, BTIG analyst Vincent Caintic noted that Capital One (NYSE:COF) may improve Discover’s acceptance rate by employing similar tactics that American Express previously used to grow its network. Caintic maintained a Buy rating with a $264 price target, and one of the main factors of being bullish on the stock is its potential for broader merchant acceptance.

Furthermore, on June 5, discussing the company, Cramer said:

“You know what, I’m hoping that COF, Capital One, which just bought Discover Financial, that it could enter the 52-week hallowed ground. It’s cheap. It’ll have a gigantic buyback come July… COF, I feel very lonely, but I won’t come July.”

Capital One (NYSE:COF) is a financial services holding company that provides credit cards, loans, and banking services. Additionally, the company offers advisory services and capital markets solutions.

While we acknowledge the potential of COF as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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