Bank of America Merrill Lynch Has Buy On Capital One

Bank of America Merrill Lynch has a Buy rating and a $65 price target on shares of Capital One Financial COF. In a note to clients, Bank of America Merrill Lynch writes, "We are raising our Q2'11 and full-year 2011 EPS estimates to $1.81 and $7.35, respectively, to reflect lower credit costs. The $1.00 increase from our prior 2011 estimate is 50% lower losses and 50% reserve release acceleration. Our revised estimates are roughly 15% above the Street for ‘12e and ‘13e. We are modeling U.S. Card charge-offs to exit 2011 at 4.9% vs. 6.2% in Q1 and 4.97% in April. We are also revising our ‘12 and ‘13 EPS estimates to $6.60 and $7.05, respectively, as we expect loan losses to trend toward 4.5%. Importantly, loss rates could trend lower if roll-rates improve, which we think is a distinct possibility." Shares of COF gained 52 cents yesterday to close at $50.06, a gain of 1.05%.