In the report published Wednesday, the analysts mentioned Huntington had the lowest minimum stressed CET1 of the regionals at 5.6 percent, even though it did not ask for any share repurchases, contrary to their estimates of $185 million buyback.
As a positive sign, they mentioned the company's planned quarterly dividend increase to $0.08 per share in the fourth quarter of 2016. "Still, the projected total payout ratio during the next CCAR cycle is 34 percent, below our prior assumption and management guidance of 50 percent. However, it is important to note that there was only a minimal 1 percent drag on 2017 EPS from the lack of a buyback," wrote BMO.
The analysts reduced their EPS estimates to $0.82 for 2016 and to $0.92 for 2017, which assumes 2 percent and 12 percent growth rates for 2016 and 2017, respectively. According to them, this move was triggered by a weaker NIM trajectory and the removal of share buybacks through the first half of the next year. They kept the Market Perform rating and $11 price target unchanged.
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