Jefferies Upgrades Huntington Bancshares To Buy

According to Jefferies, Huntington Bancshares HBAN has underperformed after a strong early '11 run, and risk/reward looks attractive again with no major changes to fundamentals. Jefferies reported that shares trade at 1.45x tangible book and 9.5x normalized EPS (vs 1.65x and 10x for the group, respectively). “We believe HBAN's long-term 13-14% return on tang. equity potential warrants a valuation closer to the group average. Our price target of $8 applies a 13.5x multiple to Huntington's normalized earnings power of $0.70 in 2013 (discounted 2 years at 10%). This is slightly higher than the bank's historical forward multiple of 13x (from 2001-07) to account for excess capital and better risk mgmt. Risks include a slower economic recovery in the Midwest and unexpected margin pressure.” Huntington Bancshares closed yesterday at $6.64.