Fannie Mae, Freddie Mac shares tumble after conservatorship comments
On Thursday, Citi analysts, led by Keith Horowitz, revised the price target for Huntington Bancshares (NASDAQ:HBAN) stock, reducing it to $20.00 from the previous $21.00 while maintaining a Buy rating. With the stock currently trading at $14.55 and showing signs of being undervalued according to InvestingPro analysis, this target suggests significant upside potential. Notably, six analysts have recently revised their earnings expectations upward for the upcoming period. Horowitz provided insights into the rationale behind the adjustment, citing updates to the bank’s financial model in anticipation of first-quarter earnings, changes in base case rates forecast, and recent management commentary from an industry event. The bank, currently valued at $21.15 billion by market capitalization, trades at a modest P/E ratio of 11.78 and offers an attractive dividend yield of 4.26%.
The analyst expressed continued confidence in Huntington Bancshares’ performance, anticipating it to be on the higher end of their projected net interest income (NII) growth of 4-6% year-over-year. This outlook is supported by organic loan growth and a net interest margin (NIM) that is expected to remain above 3%, aided by fixed-rate asset and deposit repricing strategies, as well as the bank’s existing hedge book. InvestingPro data reveals the bank’s impressive 55-year streak of consistent dividend payments, demonstrating long-term financial stability. Get access to more exclusive insights and detailed analysis in the Pro Research Report, available to InvestingPro subscribers.
Horowitz also mentioned the possibility of Huntington resuming stock buybacks in 2026, as the bank works towards a pro-forma Common Equity Tier 1 (CET1) ratio between 9-10%, up from the current 8.7%. There is an upside risk that these repurchases could start earlier, towards the end of 2025, if adjustments in accumulated other comprehensive income (AOCI) allow for faster achievement of the capital target.
The reduction in the price target to $20 reflects a downward revision of estimates by 5 cents, applying a 12 times multiple for the years 2025 to 2027. Despite this change, Horowitz’s stance on Huntington Bancshares remains positive, as indicated by the maintained Buy rating.
In other recent news, Huntington Bancshares has been the focus of several analyst updates and strategic developments. Baird upgraded Huntington’s stock rating from Neutral to Outperform, setting a price target of $18.00. This follows Baird’s optimism regarding the bank’s potential for above-average pre-provision net revenue growth, driven by net interest margin expansion and new market initiatives. DA Davidson maintained a Buy rating on Huntington Bancshares, though it adjusted the price target from $21.50 to $20.50, citing robust revenue growth but noting increased expenses. Truist Securities also expressed confidence in Huntington, raising its price target from $19.00 to $21.00 while maintaining a Buy rating. This adjustment reflects positive expectations for future earnings, with anticipated growth in loans, deposits, and fees.
Huntington Bancshares is focusing on organic growth, moving away from mergers and acquisitions, as highlighted by DA Davidson. The firm expects positive operating leverage in 2025, projecting it to be at the upper end of its peers. Additionally, Truist Securities anticipates the bank could resume share repurchase programs in 2026, aiming for an adjusted Common Equity Tier 1 ratio of approximately 9.5%. The bank’s strategic expansion into markets such as Texas and the Carolinas has been noted by Truist, which initiated coverage with a Buy rating and a $19.00 price target. These developments underscore Huntington’s focus on sustainable growth and long-term performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.