UPDATE 1-RESEARCH ALERT-FBR, Jefferies up Capital One target

miércoles 24 de septiembre de 2008 15:29 CEST

 (Recasts; adds analysts' comments)
 Sept 24 (Reuters) - Friedman Billings Ramsey and Jefferies
& Co raised their price target on credit card and banking
company Capital One Financial Corp (COF.N: Cotización) on Wednesday, a day
after it set plans to sell 14 million common shares.
 Friedman analyst Scott Valentin raised his price target on
the stock to $35, but maintained an "underperform" rating.
 "This reflects our belief that Capital One is a survivor,
but faces a deteriorating credit environment, as indicated by
the increasing unemployment rate, which has negative earnings
implications," Valentin said.
 Fox-Pitt Kelton's Howard Shapiro said, "While the increase
in the share count will be dilutive to earnings per share and
exert downward pressure on return on equity, the offering puts
the company in an 'offensive' position."
 Shapiro maintained his "underweight" rating and $34 price
target on the stock.
 Jefferies analyst Richard Shane raised his price target on
the stock to $47 from $40, and said that while the capital
raise could be a strategic long-term positive, he sees
additional headwinds for Capital One's earnings over the
foreseeable future.
 All three analysts expect the company to use the additional
capital for acquisitions.
 "Specifically, we expect Capital One Financial to target
attractively priced depository institutions, or branch networks
to grow the company's deposit base," Jefferies' Shane said.
 The following table lists the changes to 2008
earnings-per-share estimates for Capital One by the brokerages.
                         New      Old
 Citigroup               $4.70    $4.85
 FBR                     $4.51    $4.32
 Fox-Pitt                $4.59    $4.65
 Jefferies               $4.11    $4.40
 (Reporting by Vidya L Nathan in Bangalore; Editing by Pratish