Get Premium Data for Cyber Monday: Up to 55% Off InvestingProCLAIM SALE

Hancock Whitney holds stock price target on stable outlook

EditorNatashya Angelica
Published 17/04/2024, 19:42
HWC
-

On Wednesday, Stephens maintained an Equal Weight rating and a $50.00 stock price target for Hancock Whitney (NASDAQ:HWC), following the company's first-quarter earnings report. The bank's financial results surpassed consensus forecasts, propelled by robust fee income and effective cost management.

Despite no revisions to the 2024 guidance, the tone during the earnings call was notably more positive regarding future fees, operating expenses, and non-interest bearing (NIB) deposits.

Hancock Whitney's recent earnings call revealed a more optimistic outlook for the bank's fee income and expense control. The bank's deposit costs are expected to reach a peak, potentially leading to stable net interest income (NII) in the second quarter of 2024.

Moreover, with capital ratios on the rise, the forecast includes a prediction for increased capital returns through a higher cash dividend payout and further stock repurchase activities in the second half of 2024 and into 2025.

Credit trends at Hancock Whitney are showing signs of normalization, with an uptick in nonaccrual and criticized loans in comparison to last quarter. This normalization is part of the broader financial landscape the bank is navigating. Despite these credit movements, the bank's overall financial health appears to remain solid, with expectations of continued capital build-up.

The $50 stock price target set by Stephens is based on a 10 times multiple of the 2025 earnings per share (EPS) forecast of $4.97 and 1.3 times the 12-month trailing book value per share (TBVPS) forecast. This valuation reflects the firm's neutral stance on the bank's stock, indicating that the current price adequately reflects the bank's expected future performance.

In summary, Stephens' outlook for Hancock Whitney remains unchanged at an Equal Weight rating, with a steady price target of $50.00. The bank's first-quarter performance, characterized by strong fee generation and cost efficiency, coupled with a positive tone regarding future financial controls and deposit costs, suggests a stable path ahead for Hancock Whitney's financials.

InvestingPro Insights

Recent data from InvestingPro underscores the financial stability of Hancock Whitney (NASDAQ:HWC). The bank's adjusted market capitalization stands at $3.74 billion, with a trailing twelve-month price-to-earnings (P/E) ratio of 9.71, indicating a potentially undervalued stock compared to the industry average.

Despite a slight decrease in revenue growth over the last twelve months as of Q4 2023, Hancock Whitney maintains a strong operating income margin of 41.71%, reflecting efficient management and profitability.

Notably, the InvestingPro Tips highlight that Hancock Whitney has a high shareholder yield and has consistently paid dividends for 37 consecutive years, which may be particularly attractive to income-focused investors.

Still, analysts are cautious, with three having revised their earnings estimates downwards for the upcoming period, and the company's gross profit margins are considered weak. Yet, the bank is expected to remain profitable this year, a sentiment echoed in the positive tone of the recent earnings call.

For investors seeking further insights and additional tips, there are 5 more InvestingPro Tips available for Hancock Whitney. These insights could provide a deeper understanding of the bank's financial health and future prospects. Interested readers can unlock these tips with an exclusive offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.