DA Davidson raises Huntington Bancshares stock target with Buy rating

On Monday, DA Davidson increased the price target for Huntington Bancshares (NASDAQ:HBAN) shares to $17.50, up from the previous $15.00, while reiterating a Buy rating on the stock. The firm's analyst cited Huntington Bancshares' consistent 2024 outlook, which had been revised earlier on June 10, 2024.

The company had adjusted its Net Interest Income (NII) forecast downward by 1-4%, a change from the earlier range of a 2% decrease to a 2% increase. This revision was based on expectations of a more stable Net Interest Margin (NIM) compared to prior projections of NIM growth.

Huntington Bancshares now anticipates its NII to be at the midpoint of the revised range, assuming a flat margin and the possibility of two interest rate cuts. The company has reported loan and deposit growth that surpasses that of its peers, which is expected to carry strong momentum into 2025.

Additionally, Huntington anticipates that expense growth will slow to low single digits in 2025.

The new price target of $17.50 reflects a target P/E multiple of 11.5 times DA Davidson's 2025 earnings per share forecast of $1.44 for Huntington Bancshares. The analyst's positive outlook is supported by the company's above-average growth in loans and deposits, and the expectation of moderated expense growth in the upcoming year.

In other recent news, Huntington Bancshares reported second-quarter earnings of $0.30 per share, surpassing the consensus estimate by $0.02, a development that led Stephens to raise its price target for the company to $16 from $14.

The company's deposit growth, which saw an average annualized increase of 7.7%, outpaced its peers despite a previous substantial downward adjustment in net interest income guidance. Notably, the company reaffirmed its outlook for 2024.

Several analyst firms have adjusted their outlook on Huntington Bancshares. Piper Sandler raised its price target to $13.50, citing the company's strong performance. However, the same firm later downgraded Huntington Bancshares to Neutral, reducing its price target to $11.50 following mid-quarter updates from large banks.

RBC Capital maintained an Outperform rating and raised its price target to $17, citing the bank's solid second-quarter results and growth-driving initiatives.

UBS also adjusted its financial outlook for the company, reducing the price target to $15 while maintaining a Buy rating. This decision came in light of recent economic developments and their impact on rate assumptions.

JPMorgan upgraded Huntington Bancshares from Neutral to Overweight, raising its price target to $18.00, reflecting confidence in the bank's growth potential. Finally, Huntington Bancshares announced the appointment of Angie Klett as President of Huntington Insurance, Inc., and plans to launch two new deposit verticals in 2024.

InvestingPro Insights

InvestingPro data and insights present a multifaceted view of Huntington Bancshares that aligns with DA Davidson's recent price target update. The company's market capitalization stands strong at $21.6 billion, and it boasts a P/E ratio of 14.02, which adjusts to a slightly lower 13.65 when considering the last twelve months as of Q2 2024. Despite a decrease in revenue growth by 7.32% over the same period, Huntington Bancshares has maintained a robust operating income margin of 36.13%. Additionally, the company has rewarded shareholders with consistent dividends, yielding 4.17% as of the latest data.

Two InvestingPro Tips that are particularly relevant to the article include the company's significant return over the last month, marked at 17.66%, and the fact that Huntington Bancshares has maintained dividend payments for 54 consecutive years, underscoring its stability and commitment to shareholder returns. These factors may contribute to the analyst's confidence in the company's performance and the raised price target. For those interested in further insights, InvestingPro offers additional tips on Huntington Bancshares, which can be found at https://www.investing.com/pro/HBAN. To access these and other valuable tips, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.

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