NEW YORK (Reuters) - Shares of credit card issuer Capital One Financial (>> Capital One Financial Corp.) could jump 40 percent in the next three years, according to a report in financial weekly Barron's on Sunday.

The report cites the stock's recent underperformance, low valuation, an attractive outlook for dividends, its stock buyback and a plan to aggressively cut costs.

Capital One's stock has risen 24 percent this year compared to a 27 percent rise in the S&P 500 <.SPX> and a 43 percent jump in the SPDR Regional Banking exchange traded fund (>> SPDR KBW Regional Banking (ETF)), Barron's said, adding it has underperformed rivals Discover Financial Services (>> Discover Financial Services) and American Express (>> American Express Company).

"Misfires" at the company have created doubts about its strategy and execution, which are holding the stock back, Barron's said, citing a recent earnings miss amid higher costs.

Capital One's shares closed Friday at $71.63, or 10 times earnings. That compares to 11, 12, or 13 times earnings at regional banking and credit card peers. The share price is roughly in line with book value of $71.70, Barron's said.

The company has committed to returning 50 percent of earnings to shareholders in 2014, is buying back stock, and could boost its annual dividend, Barron's said.

(Reporting by Edward Krudy; Editing by Nick Zieminski)