Huntington Bancshares Gets Bullish Upgrade, Analyst Forecasts Accelerated Growth Despite Rate Worries

Huntington Bancshares Incorporated HBAN shares are trading higher today. BofA Securities analyst Ebrahim H. Poonawala upgraded the stock to Buy (from Neutral) and raised the price target to $16 (from $14).

The analyst says that Huntington Bancshares is well-positioned to navigate multiple macroeconomic outcomes.

Moreover, franchise investments, footprint, and solid execution is expected to drive an acceleration in revenue growth into 2025, writes the analyst. The analyst says fewer rate cuts are positive, with a potential for FY24 net interest income (NII) to remain flat. 

In particular, the analyst predicts near-term growth in auto floor plan/inventory finance (Q1 seasonally strong) to provide defensibility and forecasts revenue growth accelerating to +8.4% FY25 (vs. +3.7% peer median).

The analyst writes that $13 billion-15 billion in fixed-rate loan repricing should serve as a tailwind to NII growth in FY24/FY25. 

Poonawala revised the EPS estimates by 4% to $1.20 for FY24, 15% to $1.44 for FY25, and 14% to $1.55 for FY26 thanks to higher NII. 

In January 2024, Huntington Bancshares reported a 10% Y/Y decline in fourth-quarter FY23 net interest income, and CEO Steve Steinour expressed optimism for 2024, highlighting attractive growth prospects and potential acceleration in loan growth.

Investors can gain exposure to the stock via IShares U.S. Regional Banks ETF IAT and SPDR S&P Regional Banking ETF KRE.

Price Action: HBAN shares are up 2.83% at $13.98 on the last check Monday.

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