Huntington Bancshares Underperforming Relative To Peers, Analyst Downgrades Stock

Zinger Key Points
  • Analyst downgrades Huntington Bancshares due to anticipated underperformance.
  • Huntington's loan growth outlook revised downward for fiscal year 2024.

Piper Sandler analyst R. Scott Siefers lowered Huntington Bancshares Incorporated HBAN to Underweight from Neutral, lowering the price forecast to $11.5.

According to Siefers, the stock is in for a period of underperformance following a stronger start to the year.

Huntington Bancshares started the year on a solid note, highlighting a differentiated loan growth opportunity thanks to its SE expansion and specialty verticals.

The analyst writes that the net interest income (NII) trajectory seemed strong, with the net interest margin (NIM) expected to trough early in the year and increase pretty heavily after that.

However, things toned down for Huntington Bancshares, with expenses growing 4.5% this year, just as most large regionals hope to keep costs flat.

Further, the firm’s NIM lift lost some steam around the first quarter earnings, and most recently, Huntington Bancshares dialed down its fiscal year 2024 loan growth outlook.

According to Siefers, the company’s NII trajectory is now “less robust than at some other peers.”

The bottom line is that following a solid several months and in light of some steps back in the earnings outlook, the analyst projects the stock will have trouble keeping pace with peers for the time being and will be in for a period of underperformance.

The analyst lowered Huntington Bancshares 2024 earnings per share to $1.17 from $1.18.

The earnings per share estimate for 2025 has been decreased to 1.28 from the prior view of $1.35.

Price Action: HBAN shares are trading lower by 0.32% to $12.30 at the last check on Friday.

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Photo by Jonathan Weiss via Shutterstock

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