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Capital One Stock Weak After Earnings, Brex Deal in Focus
Author: Chris Markoch. Date Posted: 1/29/2026.
In Brief
- Capital One stock fell 6% after earnings despite revenue beating expectations.
- The Brex deal expands Capital One’s payments strategy but adds near-term risk.
- Technical indicators suggest COF may be forming a buy-the-dip setup.
Capital One Financial (NYSE: COF) stock is down roughly 6% one week after the bank's earnings report on Jan. 22. For the fourth quarter of 2025, the company reported $15.62 billion in revenue, topping expectations of $15.49 billion. However, the bottom line missed: earnings per share were $3.86 versus estimates of $4.14.
From a valuation standpoint, the selloff in COF stock looks understandable. Even after the decline, Capital One still trades at a price-to-earnings (P/E) ratio north of 74x — a sizable premium to its historical average and well above the norm for financial stocks.
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Get the full story on this opportunity now.That said, both the top- and bottom-line results were higher year-over-year. EPS rose 24% and revenue was up a striking 53% compared with the prior year.
Those gains suggest Capital One is in an expansion phase that could continue into 2026. Some investors felt that growth was already priced into COF stock heading into the report, but another potential catalyst emerged with the earnings release.
Capital One to Acquire Brex
Alongside its earnings, Capital One announced it will acquire Brex Inc., a private financial services and payments startup, for $5.15 billion. The transaction will be financed 50% in stock and 50% in cash and is expected to close in the second quarter of 2026.
Brex provides enterprise financial services for managing corporate credit cards, expenses and rewards — primarily targeting startups and other businesses that struggle to attract attention from traditional corporate providers like American Express (NYSE: AXP).
With customers that include Robinhood Markets (NASDAQ: HOOD) and Intel Corp. (NASDAQ: INTC), Brex has amassed more than $13 billion in deposits.
Capital One CEO Richard Fairbank framed the acquisition as part of the bank's long-term plan "to build a payments company that sits at the frontier of the technology revolution." Acquiring Brex outright, rather than simply partnering, sets Capital One apart from other banks that are responding to nimble fintech competitors with alliances or integrations.
The Deal Is Not Without Risk
Investors may worry about Capital One's growing appetite for acquisitions. The Brex purchase comes less than a year after the company closed its deal for Discover Financial for $35 billion.
On the plus side, the deal could give Capital One the scale to better compete with payment giants like Visa (NYSE: V) and Mastercard (NYSE: MA). It also appears unlikely to materially change the company's debt outlook.
Execution will be critical. If integration became more important following the Discover transaction, it is even more so now. Brex hit its peak valuation in 2023 amid a surge of deposits from technology companies that fled Silicon Valley Bank; since then, rising interest rates have dampened demand. That context has allowed Capital One to acquire Brex for less than half its peak valuation.
COF Stock Looks Like an Attractive Buy-the-Dip Candidate
The post-earnings price action in COF stock reads like a case of selling first and asking questions later. The shares are trading within roughly 10% of their 60-day low — a level that has acted as support over the past six months.
Analysts assign COF a consensus price target of $274.70, implying about 24% upside from the stock's price at the time of writing. More encouragingly, technical momentum indicators such as the MACD and the relative strength index (RSI) suggest the stock is bouncing off oversold levels.
Investors looking to buy the dip may consider entries below the company's 20-day simple moving average (SMA), which has served as a key resistance level over the last six months.
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