Capital One Financial Corp.'s shares rose as much as 1.2% in pre-market trading Friday morning, a day after it announced a deal to acquire ING Group NV's U.S. online banking unit for $9 billion.
John Stilmar, an analyst with SunTrust Robinson Humphrey, upgraded his rating of Capital One on Friday to "buy" from "neutral," citing in a research note the company's potential to generate earnings per share of $7 in 2013 as a result of the deal as well as position it to do another deal.
The Wall Street Journal reported this week that Capital One also is bidding to buy HSBC's U.S. credit cards business.
If Capital One decided not to do another large acquisition in the immediate future, "it will likely have excess capital to return in shareholder friendly ways," Stilmar wrote.
The company said Thursday that it expects the acquisition to close in the fourth quarter or the first quarter of 2012. Capital One will gain $80 billion in deposits through the acquisition, making it the fifth-largest bank holding company based on total deposits, according to SNL Financial.
Capital One plans to pay $6.2 billion in cash and $2.8 billion in stock for the deal.
FBR Capital Markets analyst Scott Valentin on Friday raised his 2012 earnings estimates for Capital One to $5.60 from $5.50.
"Overall, the transaction's financial impact is more favorable than we expected," Valentin wrote in a research note, adding that integration risk for the company is low given ING's "relatively simple balance sheet" and Capital One's "online banking experience."
The main impetus for the deal is likely to generate funding to go after other acquisitions, Valentin wrote.
