Deutsche Bank raises Huntington Bancshares stock rating to buy

Published 24/04/2025, 09:20
Deutsche Bank raises Huntington Bancshares stock rating to buy

On Thursday, Deutsche Bank (ETR:DBKGn) analyst Matt O’Connor upgraded Huntington Bancshares (NASDAQ:HBAN) stock from Hold to Buy, adjusting the price target to $17.50 from a previous $19.00. The upgrade follows a period of underperformance in the market, with Huntington’s shares experiencing a 17% decline since the market highs in February, a slightly better performance compared to the 20% drop in the BKX index. According to InvestingPro data, the stock is now trading at an attractive P/E ratio of 10.7x, with shares down nearly 12% year-to-date.

O’Connor highlighted Huntington’s robust loan growth, which has been bolstered by strategic company initiatives and the introduction of new commercial verticals. These efforts have contributed to half of the loan growth in the first quarter of the year. The bank’s management has also revised its forecast for net interest income for the fiscal year 2025 upwards, thanks to a strong first quarter and the anticipation of sustained loan growth. InvestingPro analysis reveals that seven analysts have recently revised their earnings estimates upward, suggesting growing confidence in the company’s outlook. For deeper insights into Huntington’s financial health and growth prospects, subscribers can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Despite the positive adjustments to the company’s outlook, the analyst suggests that the new guidance may still be on the conservative side. This view is based on the strong starting point seen in the first quarter and management’s expectations for net interest margin (NIM), as well as loan and deposit trajectories. The revised price target of $17.50, down from the previous $19.00, reflects a more cautious valuation in light of the current market conditions. Notably, Huntington maintains a solid 4.37% dividend yield and has consistently paid dividends for 55 consecutive years, according to InvestingPro data.

In other recent news, Huntington Bancshares reported impressive first-quarter 2025 results, surpassing analysts’ expectations with an earnings per share (EPS) of $0.34, compared to the forecasted $0.31. The company also exceeded revenue projections, posting $1.94 billion against an anticipated $1.89 billion. This strong performance was attributed to a 24% year-over-year increase in pre-provision net revenue and an 11% rise in net interest income. Following these results, both Truist Securities and DA Davidson maintained their Buy ratings on Huntington Bancshares, despite reducing their price targets to $17 and $18, respectively, due to increased recession risks. Truist cited Huntington’s robust loan growth and diverse revenue streams as strengths, while DA Davidson highlighted peer-leading growth in loans and deposits. Huntington’s guidance for 2025 includes expectations of 5-7% loan growth and 3-5% deposit growth, with net interest income projected to rise by 5-7%. Despite economic uncertainties, Huntington Bancshares continues to demonstrate strong operational performance and strategic growth initiatives.

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