Capital One Financial has spent more than a year integrating Discover while investors watch whether the massive acquisition can translate into faster growth and stronger returns.
The latest monthly data gave Wall Street a mixed picture. Capital One (COF) posted healthy credit trends in July, but growth in its domestic card portfolio slowed from the prior month.
Bank of America is still sticking with the stock.
In a note given to TheStreet, BofA analyst Mihir Bhatia maintained a Buy rating and a $253 price objective on Capital One, representing 11.3% upside from the $227.34 share price used in the report.
Bhatia said July’s operating metrics remained healthy overall, pointing to solid credit performance even as card balances grew at a slower pace.
Capital One card growth slows in July
Capital One ended July with $258.9 billion in domestic credit card loans, according to a filing with the Securities and Exchange Commission. The portfolio’s annualized net charge-off rate was 4.12%, while the 30-day-plus performing delinquency rate came in at 3.48%.
BofA said domestic card loans were up 1.92% from a year earlier, slowing from 2.58% growth in June. Card balances have grown at around 2% for roughly the past year, according to Bhatia.
The analyst does not expect a meaningful acceleration until headwinds tied to the Discover integration and related borrow-out activity begin to clear. BofA is modeling end-of-period card loans to increase by about 1% sequentially in the third quarter.
That slowdown comes as Capital One continues working through its integration of Discover. The company completed its acquisition in May 2025, adding the Discover, PULSE, and Diners Club International networks to its business.
Capital One CEO Richard Fairbank said in July that the Discover integration was going well, 14 months after the deal closed. The company reported $3 billion in second-quarter net income, while total net revenue increased 4% sequentially to $15.9 billion.
Credit trends give BofA more confidence
While card growth has cooled, BofA sees credit quality moving in a more encouraging direction.
Capital One’s domestic card net charge-off rate fell 26 basis points month over month in July. BofA noted that the decline was better than the 20-basis-point average decrease historically seen in July between 2013 and 2019.
