On Wednesday, Citi maintained its Buy rating on Hancock Whitney (NASDAQ:HWC) and raised the share price target to $61 from $55. The adjustment follows the bank's recent quarterly report, which showed softer-than-expected loan growth but a positive outlook for net interest margin (NIM) expansion and profitability.
The financial institution's Common Equity Tier 1 (CET1) ratio, a key measure of financial strength, now stands above 13%, suggesting that Hancock Whitney may engage in more opportunistic share repurchases.
However, the bank's strategy prioritizes retaining capital for organic growth and potential partnerships, which are anticipated to become a higher priority in 2025 and beyond.
Citi highlighted that expense management at Hancock Whitney continues to contribute positively to the bank's financial performance. The analyst expects that most of the anticipated NIM improvement in the second half of 2024 will be driven by higher yields on average earning assets (AEA). Additionally, the bank's strategy for pricing certificates of deposit (CDs) and deposits is likely to support favorable margin trends, even if interest rate cuts occur.
The report suggests that Hancock Whitney is in a solid position to manage its expenses and capital, which could lead to continued profitability. The bank's strategic approach to pricing and growth initiatives appears to align with a stable financial outlook, as reflected in Citi's revised price target and sustained Buy rating.
In other recent news, Hancock Whitney Corp has been the focus of several analyst reports. DA Davidson reaffirmed its Buy rating on Hancock Whitney, highlighting the company's ability to manage funding costs and drive positive revenue growth through 2025. The firm also noted Hancock Whitney's top quartile profitability, particularly its return on assets (ROA), and maintained its price target of $57.00.
Meanwhile, Citi initiated a 90-day upside catalyst call on Hancock Whitney, signaling potential stock performance in the near term. Stephens maintained an Equal Weight rating and a $50.00 share price target for Hancock Whitney, following the company's first-quarter earnings report that surpassed consensus forecasts, propelled by robust fee income and effective cost management.
On the other hand, Truist Securities adjusted its outlook on Hancock Whitney, reducing the shares price target to $46 from the previous $50, while keeping a Hold rating on the stock.
The securities firm acknowledged the slight improvement in Hancock Whitney's 2024 and 2025 EPS forecasts but expressed caution about the bank's future performance, noting the potential for limited growth.
Lastly, Piper Sandler adjusted its outlook on Hancock Whitney, reducing the price target from $55.00 to $52.00 while maintaining an Overweight rating on the stock. The firm noted that while the net interest margin (NIM) is expected to improve, the impact of a smaller balance sheet in the first quarter led to a revised earnings estimate for 2025, now set at $4.90, down from the previous $5.10.
InvestingPro Insights
As investors consider Citi's optimistic outlook on Hancock Whitney, current metrics and performance indicators from InvestingPro provide additional context. The bank's recent surge in stock price is supported by a significant 12.77% return over the last week and an impressive 19.82% over the past month, indicating strong short-term performance. Moreover, the consistent dividend payments for 37 consecutive years, complemented by a notable dividend yield of 2.98%, underscore the bank's commitment to shareholder returns.
With a P/E ratio holding steady at 12.53, Hancock Whitney's valuation remains attractive relative to earnings, further bolstered by a price sitting at 99.02% of its 52-week high, reflecting investor confidence. Although the bank faces challenges with revenue growth, down by 8.87% over the last twelve months as of Q1 2024, its robust operating income margin of 40.53% demonstrates effective cost control and operational efficiency.
For investors seeking more comprehensive analysis, additional InvestingPro Tips reveal that analysts predict profitability for the year and highlight the company's performance over the last three months, with a 26.97% return. To gain access to these insights and more, consider using the coupon code PRONEWS24 for up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro. There are 6 more InvestingPro Tips available for Hancock Whitney, which could further inform investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.