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Investing.com - Morgan Stanley (NYSE:MS) has reiterated an Overweight rating and $19.00 price target on Huntington Bancshares (NASDAQ:HBAN), currently trading at $17.07 with a market capitalization of $24.87 billion. The firm’s positive outlook stems from the strategic value of its Veritex (NASDAQ:VBTX) acquisition. According to InvestingPro analysis, HBAN appears undervalued based on its Fair Value metrics.
The research firm notes that while Veritex represents a small acquisition relative to Huntington’s overall size, it provides HBAN with significantly more scale in one of its key growth markets.
Morgan Stanley projects the acquisition will deliver modest near-term financial benefits with approximately 2% accretion to 2026 estimated earnings per share, increasing to 4% EPS accretion by 2027.
The value proposition centers on Huntington’s ability to leverage its brand, product offerings, and funding profile alongside Veritex’s operations. Specifically, Morgan Stanley expects HBAN to reduce deposit costs at Veritex, enhance fee income growth, and provide bankers with greater optionality.
While noting that Veritex has higher criticized assets and commercial real estate exposure compared to peers, Morgan Stanley believes credit risk remains low, citing recent declines in criticized assets and a 1.5% loan mark as mitigating factors. For a comprehensive analysis of HBAN’s financial health and additional insights, including 8 more key ProTips, visit InvestingPro.
In other recent news, Huntington Bancshares announced its agreement to acquire Veritex Holdings in an all-stock transaction valued at $1.9 billion. This deal will expand Huntington’s presence in Texas markets such as Dallas, Fort Worth, and Houston, adding approximately $13 billion in assets, $9 billion in loans, and $11 billion in deposits. The transaction is expected to close in the early fourth quarter of 2025, pending regulatory approvals. Meanwhile, Wolfe Research upgraded Huntington Bancshares to Outperform, citing its potential for net interest margin expansion through 2026. Jefferies also initiated coverage with a Buy rating and a $20 price target, highlighting Huntington’s strong performance in loan and deposit growth compared to peers. Additionally, Argent Institutional Trust Company acquired Huntington’s corporate trust and institutional custody business to enhance its national presence. The acquisition will include the transfer of client relationships and operational infrastructure. Huntington and Argent will continue to collaborate, ensuring continuity and high-quality service for clients.
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