Capital One And Fifth Third Bancorp's Capital Strength And Growth Prospects; Analyst Sees Upside

Capital One Financial Corporation COF reported decent results for the fourth quarter. The company reported its quarterly results amid an exciting earnings season. 

Goldman Sachs analyst Ryan M. Nash is optimistic about future performance of Capital One Financial despite slight post-market share decline.

They see stabilizing credit metrics, decreasing losses, and a continued downward trend in allowances as positive signs.

The DFS deal is expected to increase EPS power to over $22, with no major efficiency risks despite compliance investments.

Capital One Financial’s strong CET1 ratio positions it to return significant capital in the future.

With shares currently trading at just over 10x 2026E EPS, the analyst sees a potential upside as the market gains confidence in the company’s earnings and network scalability.

Once these factors are fully recognized, the analyst expects significant upside potential for the shares.

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Fifth Third Bancorp FITB reported a solid fourth quarter PPNR beat as stronger than expected fees drove the beat while expenses and NII were in-line.

Per Nash, the beat on fees was driven by strength in commercial banking and capital markets (under new disclosures), as the three-pronged fee strategy (wealth, payments, and capital markets) continues to deliver strong results.

The analyst is optimistic about Fifth Third’s fundamentals, citing record net interest income in 2025, improved loan growth, and margin expansion. Fee income growth is also a strength, and with a CET1 ratio of 10.5%, FITB is well-positioned for capital returns.

Nash notes that shares are trading at a slight premium to peers, but the analyst sees the company to maintain or even widen that premium if it continues executing well and driving positive operating leverage while investing for growth.

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