Capital One Financial Corporation (NYSE:COF) is one of the cheap S&P 500 stocks to invest in now. On January 12, RBC Capital raised the firm’s price target on Capital One to $275 from $255 with a Sector Perform rating on the shares. The firm’s Q4 2025 outlook for consumer finance suggested that solid fundamentals will persist, supported by a steady and potentially strengthening macro environment. The firm projects a sequential rise in loan volumes, fueled by year-end seasonal activity, alongside improvements in core credit performance as consumers continue to hold up well.
On the same day, JPMorgan analyst Richard Shane also increased the price target for Capital One to $256, up from $237, while maintaining a Neutral rating on the shares. This adjustment was part of the firm’s broader Q4 2025 preview for the consumer finance sector. Shane noted that a proposal from President Trump to cap credit card interest rates at 10% for one year has introduced significant near-term volatility to the industry. JPMorgan warns that such a rate reduction would fundamentally reshape the credit card market by severely cutting issuer profitability and limiting consumer access to credit.
However, the firm categorized this proposal as a high-severity, low-probability risk that would likely face major legal hurdles if pursued. Despite the increased price target, Shane suggested that a defensive investment strategy remains appropriate for the consumer finance group given these uncertainties.
Capital One Financial Corporation (NYSE:COF) operates as the financial services holding company for Capital One, National Association, which provides various financial products and services in the US, Canada, and the UK.
While we acknowledge the potential of COF as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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