Capital One's shares closed at $73.64 Thursday, returning 29% this year. The shares trade for 10.6 times the consensus 2014 EPS estimate of $6.94 and for 9.9 times the consensus 2015 EPS estimate of $7.43.
Miller raised his price target for Capital One to $85 from $82, "reflecting 12.0x our FY14 EPS estimate of $7.05 and the consensus FY14 EPS estimate of $7.06. Following a decline in Capital One's credit card portfolio this year, Miller expects a resumption of growth during 2014, as the planned runoff of card balances acquired from HSBC (HSBC) ends. Miller also expects expense cuts and an increased return of capital to investors through dividend increases and/or share buybacks to " drive a higher valuation."
USB's stock was up slightly in late morning trading Friday to $40.10, while Capital One was up 0.8% to $74.22.
The following chart shows the performance this year of U.S. Bancorp and Capital One against the KBW Bank Index (I:BKX) and the S&P 500
data by YCharts