The analyst on Tuesday reiterated his "Outperform" rating on the McLean, Va., credit card lender, following the completion of Capital One's acquisition of ING Direct on Feb. 17, and in anticipation of the company's purchase of HSBC's U.S. credit card portfolio, which is expected to be completed during the second quarter. Capital One will pay a $2.6 billion premium to acquire roughly $30 billion in credit card loans, and has the option to include $750 million in common shares as part of the purchase price.
Sakhrani raised his price target for Capital One's shares to $68 from $62, with the new target representing 38% upside from Monday's closing price of $49.38 Monday.
Capital One's shares have returned 17% year-to-date, following a flat return in 2011, which was actually a strong showing, considering that the KBW Bank Index (I:BKX) dropped 25% last year.
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