The firm lowered the price target to $86 from $94 for the U.S.-based financial holding company.
Nomura said it lowered Capital One Financial's rating because EPS growth in 2016 will be difficult, and acceleration in loan growth will not be enough to offset headwind of declining net charge-off rates.
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"It's difficult for us to see how COF can grow EPS in 2016 based on the NCO rate [(net charge-off rate)] trajectory that it has laid out," said Nomura analyst Bill Carcache. "Our analysis leads us to conclude that the tailwind from accelerating loan growth that COF is experiencing is not enough to offset the headwind associated with taking its NCO rate from ~2.8% in 3Q14 to a steady state of 3.5%."
Shares of Capital One Financial are down 1.09% to $82.33 in early morning trading on Tuesday.
Separately, TheStreet Ratings team rates CAPITAL ONE FINANCIAL CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate CAPITAL ONE FINANCIAL CORP (COF) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income."