Investors should cash out on Capital One 's stock after a massive rally this year, Baird said in a note Monday. "After being vocal bulls on COF for all of 2020 and most of this year, we now feel that the risk/reward trade-off for the stock is skewed to the downside, and we recommend taking profits here," Baird's David George and Gus Vanevenhoven said. Shares of Capital One are up 77.9% this year, compared with the S & P 500's 20.1% gain. "Put COF back in your wallet after significant outperformance," the analysts said. Baird downgraded Capital One to an underperform rating from neutral. Good news is already priced into the stock as investors anticipate an economic recovery, according to Baird. The stock is trading at peak levels compared with historic valuations, Baird said. "While we like the Cap One business model, we are growing increasingly concerned that investors are paying a peak multiple for peak earnings," the analysts said. Baird sees "limited upside" for Capital One. The firm reiterated its 12-month price target of $145 on the stock, implying downside of 17.5% from Friday's closing price of $175.80. —CNBC's Michael Bloom contributed reporting.
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Investors should cash out on Capital One's stock after a massive rally this year, Baird said in a note Monday.