Huntington Bancshares stock rating reiterated by KBW amid Texas expansion

Investing.com - Keefe, Bruyette & Woods (KBW) has reiterated its Market Perform rating and $19.00 price target on Huntington Bancshares (NASDAQ:HBAN) following the bank’s announced acquisition of Veritex (NASDAQ:VBTX) Holdings.

The $1.9 billion acquisition, valued at 1.52 times tangible book value, represents the first traditional deal by a Category III/IV bank in nearly four years, signaling an improving regulatory environment for bank mergers. Trading at a P/E ratio of 12.89x and maintaining a 55-year streak of dividend payments, Huntington shows strong fundamental positioning.

KBW noted the deal appears more focused on strategic Texas expansion than immediate financial gains, as it offers only modest earnings per share accretion for Huntington.

The acquisition announcement coincided with Huntington’s second quarter 2025 results, which KBW characterized as "solid," highlighting the bank’s above-peer organic growth while maintaining a low to moderate risk profile.

The transaction is expected to close in the fourth quarter of 2025, with KBW suggesting Huntington’s strong regulatory standing could potentially enable additional acquisitions over the medium term.

In other recent news, Huntington Bancshares has announced a significant move with its agreement to acquire Veritex Holdings in an all-stock transaction valued at $1.9 billion. This acquisition will expand Huntington’s presence in key Texas markets, including Dallas, Fort Worth, and Houston, adding approximately $13 billion in assets, $9 billion in loans, and $11 billion in deposits to its balance sheet. The transaction is anticipated to close in the early fourth quarter of 2025, pending regulatory approvals. Huntington Bancshares expects the deal to be accretive to earnings per share upon closing, although it may slightly dilute tangible book value per share initially.

Morgan Stanley (NYSE:MS) has reiterated its Overweight rating on Huntington Bancshares, citing the strategic value of the Veritex acquisition and projecting modest near-term financial benefits. Wolfe Research has also upgraded Huntington Bancshares from Peerperform to Outperform, expressing confidence in the company’s net interest margin expansion potential through 2026. Additionally, Argent Institutional Trust Company has acquired Huntington’s corporate trust and institutional custody business, enhancing its national presence and capabilities in the sector. Huntington will maintain an ongoing relationship with Argent, offering expanded services to its business and commercial banking clients.

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