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Capital One’s stock looks like a bargain following Discover acquisition - MarketWatch

1. Capital One completed its acquisition of Discover Financial Services. 2. Post-merger valuations suggest Capital One is undervalued at P/E of 9.1. 3. Analyst estimates $22.42 EPS for 2027, with potential up to $30. 4. Sakhrani predicts significant upside potential of 15%-50% for Capital One. 5. Capital One ranked eighth with $638 billion in combined assets.

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FAQ

Why Bullish?

Capital One's acquisition enhances its credit card portfolio and processing capabilities, potentially increasing future earnings. Historical examples show that successful mergers often lead to improved valuations and stock price appreciation.

How important is it?

The successful merger and future earnings potential are key factors likely to influence COF's price significantly.

Why Long Term?

The merger will take time to fully realize synergies and portfolio integration, similar to other banking mergers which took years for full benefits to materialize.

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