Cramer's Morning Take: Capital One 6/27/25

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Jim Cramer (1:04)

Hey, it's Cramer, and this is my morning take on the market from today's CNBC Investing Club Morning Meeting. Let's talk about a stock that was featured in the Hurtless Free Calm this morning. For many of the things that we've been saying for the last 30 points, a Capital One. It makes it clear that Capital One is going to be a company that can take on Market Express, has a closed loop system, is a points-based system, and younger people love points. I think that this is going to be the card of the future. I think people should still be buying this stuff.

Jeff Marks (1:35)

It's a good piece. It's Hurt on the Street. That's Wall Street Journal. They talk about how they can make more money from debit card payments than peers, moving the card, moving their cards over to the Discover Network. We've talked about that. That's a lot of the network synergies that they've talked about too. And also, this idea of having a closer relationship with merchants, that could help them build out a more premium card, compete with American Express, compete with Chase, which both, by the way, are increasing their annual fees. It's kind of turned into a nice little subscription model they have with these annual fees.

Jim Cramer (2:11)

And, you know, that should be a higher-priced earnings model. This one in particular was a surprise to me that the government let this one go through because this is very anti-competitive. But I know why they did it. It's very anti-competitive for the bank. When I say it's anti-competitive, it means that there's going to be an oligopoly, not just a duopoly, with MasterCard and Visa. But you also could say you have American Express. But they're saying that this company is going to come in and lower fees.

Jeff Marks (2:41)

Yeah. Well, look, I think the card space competition is heating up. We just talked about American Express, raise the annual fees, but adding more perks. Same with Chase. But now you have Capital One. What are they going to do? And Wells Fargo, by the way, is trying to make a really big push into the card. So it is getting actually pretty competitive. But what I will say about Capital One versus American Express, just looking at the multiples, Capital One trades at 11 times 2026 estimated earnings versus A.

Jim Cramer (3:07)

It's trades like versus Ally Financial, I would say.

Jeff Marks (3:10)

Yeah. So, I mean, look.

Jim Cramer (3:11)

Synchrony.

Jeff Marks (3:12)

So even if it re-rates to a five-turn discount, meaning 13 times on $19.32 earnings, we're talking about a $250 stock.

Jim Cramer (3:22)

That's my target right there.

Jeff Marks (3:23)

There could be some more room to run there.

Jim Cramer (3:24)

I think it's going to happen. Yeah, I'm very excited about that.

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