On Monday, JPMorgan reaffirmed its Overweight rating and $18.00 price target for Huntington Bancshares (NASDAQ:HBAN). The firm's position is buoyed by the bank's strategic growth initiatives, including the addition of new service verticals and expansion into new markets. Huntington Bancshares has broadened its portfolio to include mortgage servicing and homeowners' association (HOA) services, targeting medium-term deposit goals of over $5 billion for each vertical.
The bank's growth is also propelled by its foray into the Carolinas and Texas, where it has successfully recruited over 50 bankers, surpassing the initial goal to hire a dozen. This enhanced recruitment is expected to significantly bolster loan growth in the second half of 2024. Additionally, Huntington has seen a quarter-over-quarter increase in capital markets revenues through its Capstone division, which is anticipated to improve further as markets stabilize and strong pipelines are established.
Despite a recent reduction in the full-year 2024 net interest income (NII) guidance, JPMorgan's long-term outlook remains positive. The firm anticipates a significant acceleration in pre-provision net revenue (PPNR) into 2025, which could lead to a substantial revaluation of Huntington's shares. This optimism is reflected in the bank's current trading at only 9 times its estimated 2025 earnings per share (EPS).
Huntington Bancshares is also highlighted as one of JPMorgan's "Magnificent 7" picks, indicating a high level of confidence in the bank's performance and risk/reward profile at its current market valuation.
In other recent news, Huntington Bancshares has seen some significant developments. JPMorgan recently upgraded the bank's stock from Neutral to Overweight, indicating a positive view of the company's potential for growth and profitability. This adjustment also included an increase in the price target for Huntington Bancshares to $18.00, up from the previous target of $16.00, suggesting the firm's confidence in a strong upside for the bank.
In terms of leadership changes, Huntington Bancshares announced the appointment of Angie Klett as President of Huntington Insurance, Inc. Klett, who has a background in corporate development at Nationwide Insurance, is expected to take over the role following the retirement of Mary Beth Sullivan.
On the financial front, during its first quarter earnings call, Huntington Bancshares reported significant loan and deposit growth. The bank expects accelerated loan growth and net interest income, and anticipates an expansion in earnings for 2024 and 2025. The company also expressed confidence in its credit quality, which remains stable despite a modest decline in non-interest-bearing deposits.
InvestingPro Insights
JPMorgan's upbeat assessment of Huntington Bancshares (NASDAQ:HBAN) is echoed in some of the real-time metrics from InvestingPro. With a market capitalization of $18.13 billion and a P/E ratio that stands at 11.17, Huntington appears to be valued reasonably in the current market. The company's commitment to shareholder returns is demonstrated by its impressive track record of maintaining dividend payments for 54 consecutive years, a testament to its financial resilience and management's confidence in its business model. This is further reinforced by the company's solid operating income margin of 36.92% over the last twelve months as of Q1 2024.
Investors considering Huntington Bancshares should note that analysts predict the company will be profitable this year, which is supported by its profitability over the past twelve months. Moreover, the bank's strategic growth initiatives seem to be paying off, as reflected in the 28.98% one-year price total return. For those interested in further insights, InvestingPro offers additional tips on Huntington Bancshares, which can be found at https://www.investing.com/pro/HBAN. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enhancing your investment research with actionable data and analytics.
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