Capital One exceeded expectations in the third quarter, reporting adjusted earnings of $6.69 per share and revenue of $16.34 billion, while its shares rose 4% despite being down 13.5% year to date. Discover integration is progressing faster than expected, with about $1.8 billion in annualized synergies achieved against a target of $2.7 billion in 2027. However, marketing expenses increased 14% year over year to $1.6 billion and are expected to rise further in the fourth quarter, while a proposed Visa and Mastercard settlement with merchants could cost Capital One roughly $700 million in swipe-fee revenue. A $225 million reserve release also boosted quarterly earnings, limiting their annualizability. Bank of America and Deutsche Bank have raised concerns about profit sustainability, even though Capital One trades below nine times estimated 2027 earnings and repurchased $2.6 billion in shares during the quarter.
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