COF

The scary headline numbers are mostly purchase accounting, not deterioration. Capital One closed its Discover acquisition in 2025: shares outstanding jumped +63.1% to 622M, stockholders' equity +86.9% to $114B, and total assets +36.5% to $669B. That same deal drives the ugly P&L — the MD&A shows provision for credit losses leapt 76% to $20.7B (the day-one CECL allowance build on acquired loans), which is the primary reason net income fell 48% to $2.45B and diluted EPS collapsed 65% (from $11.59 to $4.03). So the stated P/E of ~50 and ROE of 2.2% are distorted artifacts, not the franchise's true earning power. (The P/S of 15.5 should be ignored entirely — it's built on a partial contract-revenue tag, not the bank's $53.4B of total net revenue.)

Strip the noise and value the equity on book. Book value per share is $181.76 and tangible book is $107.72, against a $201.53 price — roughly 1.1x book and ~1.9x tangible book, and the stock has already pulled back ~17% from its $242.36 year-end print. For a top-tier card lender that now also owns payment rails, ~1.1x book with depressed-but-recovering earnings is undemanding. Underlying franchise momentum is intact: total net revenue grew 37% to $53.4B and net revenue margin expanded to 9.77% from 8.62%.