On Monday, Piper Sandler adjusted its outlook for Huntington Bancshares (NASDAQ:HBAN), reducing the stock price target to $13.50 from the previous $14.00 while maintaining a Neutral rating on the stock. The revision follows Huntington Bancshares' presentation at an industry conference where the company updated its fiscal year 2024 guidance.
Huntington Bancshares announced a decrease in its forecast for average loan growth and net interest income (NII) for the fiscal year 2024. However, it also reported an improvement in its expectations for average deposit growth. The update led Piper Sandler to anticipate a potential decline in the company's share price at market open.
The firm noted that Huntington Bancshares had previously distinguished itself with a positive outlook on loan growth, which is now less certain. The banking sector is generally expected to face challenges with loan growth, and while this impacts all players, Huntington Bancshares was not expected to be among the first to lower its guidance.
Moreover, the bank's net interest income outlook for fiscal year 2024 was also considered a key strength, but the latest disclosure suggests that net interest margin (NIM) expansion and NII progression may not be as strong as previously hoped. This change in guidance is seen as a departure from the more optimistic projections that had been set by Huntington Bancshares for the coming year.
In other recent news, the firm announced major changes in its 2024 outlook, including a downward revision of its loan growth forecast and an increase in its deposit cost outlook due to higher funding costs. Huntington plans to launch two new deposit verticals in 2024 and anticipates a decrease in net interest income (NII). Despite these changes, the fee and expense outlooks remain unaltered.
The company has also seen a boost in its ratings from analysts. Stephens maintained an Equal Weight rating with a $15.00 price target. In contrast, JPMorgan (NYSE:JPM) upgraded Huntington from Neutral to Overweight and raised its price target to $18.00, reflecting confidence in the bank's growth potential. JPMorgan's optimism is further evidenced by the inclusion of Huntington in its "Magnificent 7" picks.
In terms of leadership changes, Huntington announced the appointment of Angie Klett as President of Huntington Insurance, Inc., following the retirement of Mary Beth Sullivan. Klett's role will be to expand Huntington's insurance division, leveraging her extensive experience in corporate development at Nationwide Insurance. These recent developments highlight Huntington Bancshares' strategic focus on growth and profitability.
InvestingPro Insights
Piper Sandler's revised outlook on Huntington Bancshares (NASDAQ:HBAN) aligns with some of the real-time data and InvestingPro Tips available. Despite the lower guidance for loan growth and net interest income for fiscal year 2024, HBAN has maintained a robust dividend payment track record, with dividends paid out for 54 consecutive years, underscoring a commitment to shareholder returns. Furthermore, the company's profitability is not in question, as analysts predict profitability this year, and the bank has been profitable over the last twelve months.
From an investment metrics standpoint, Huntington Bancshares' Market Cap stands at $18.13 billion, with a P/E Ratio of 11.17 reflecting its earnings compared to its share price. Additionally, the company's Price to Book ratio as of the last twelve months is 1.07, indicating that the stock may be reasonably valued in terms of its assets. However, revenue growth has seen a decline of 5.79% over the last twelve months as of Q1 2024, which could be a point of consideration for investors looking at the company's growth trajectory.
InvestingPro subscribers have access to a number of additional tips that can provide deeper insights into HBAN's financial health and investment potential. For those interested in gaining an edge with more exclusive tips, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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