On Wednesday, JPMorgan updated its outlook on Huntington Bancshares (NASDAQ:HBAN) stock, reiterating an Overweight rating while increasing the price target to $20.00 from the previous $18.50. Currently trading at $17.63 with a market capitalization of $25.6 billion, the stock has demonstrated remarkable strength with a 43.57% gain year-to-date.
According to InvestingPro analysis, the revision reflects the firm's confidence in the bank's potential earnings growth and net interest income (NII) trends, which are expected to outperform initial projections.
The bank's anticipated 25% earnings per share (EPS) increase is attributed to stronger than expected NII trends. Trading at a P/E ratio of 16.82, Huntington offers a solid dividend yield of 3.52%. JPMorgan addressed the concerns regarding Huntington's asset sensitivity and the potential impact of Federal Reserve rate cuts on its NII.
The firm believes these worries are exaggerated, citing Huntington's deposit mix and strategic approaches as mitigating factors. (InvestingPro subscribers can access 8 additional key insights about HBAN's financial health and growth prospects.)
Despite the headwind of receive fixed swaps becoming active in 2025, JPMorgan forecasts an upside to Huntington's 2025 NII. This outlook is based on a more conservative view of loan growth compared to other market expectations. In the near term, the firm models a 6% upside to the bank's 2025 EPS relative to the consensus. This, combined with a modest improvement in valuation, is projected to drive approximately a 13% increase in stock value.
Looking further ahead, JPMorgan suggests that Huntington's conservative credit risk profile should help the bank maintain stability even if the economy experiences a downturn. One notable strength revealed by InvestingPro is the bank's impressive 54-year track record of consecutive dividend payments, demonstrating long-term financial resilience. The firm's analysis indicates that Huntington is well-positioned to navigate future challenges while capitalizing on current financial trends.
In other recent news, Huntington Bancshares delivered strong Q3 2024 results, recording earnings per common share of $0.33 and an impressive return on tangible common equity of 16.2%. The bank reported a year-over-year loan growth of 3.1% and an increase in deposits by $8.3 billion. Looking ahead, Huntington Bancshares anticipates a record net interest income by 2025 and projects loan growth of 4-5% year-over-year for Q4 2024.
Analysts from Citi have reaffirmed their Buy rating on Huntington Bancshares, underlining their confidence in the bank's strategic financial management. The firm's optimism is fueled by the anticipated benefits from fixed asset repricing and Huntington's strategy to manage interest rate impacts. These factors are expected to lead to a net interest income in Q4 2025 and full-year 2026 that surpasses consensus expectations.
On the other hand, Piper Sandler has maintained its Underweight rating on Huntington Bancshares, despite adjusting its price target to $15.00 from the previous $14.00. The firm has also fine-tuned its earnings per share estimates for the upcoming years, slightly increasing the 2024 estimate from $1.19 to $1.20 and reducing the 2025 forecast from $1.31 to $1.28.
In other company news, Huntington Bancshares has expanded its branch network into the Carolinas and enhanced its merchant acquiring capabilities. However, a slight decline in net interest margin to 2.98% was noted. These are recent developments that investors and market watchers will be keeping an eye on as Huntington Bancshares continues to navigate the financial landscape.
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