On Wednesday, Piper Sandler, a financial services firm, adjusted its outlook for Hancock Whitney (NASDAQ:HWC) shares, increasing the bank's price target to $62 from $52. The firm sustained its Overweight rating on the stock, indicating a positive outlook on the bank's financial performance.
The revision of the price target comes as Piper Sandler anticipates a higher net interest margin (NIM) and reduced expenses for Hancock Whitney. The firm's analysts have updated their earnings estimates for 2024 and 2025 to $5.20 and $5.15 respectively, up from the previous $4.91 and $4.95. This adjustment aligns the firm's projections with the current consensus for 2025.
In their analysis, Piper Sandler noted a reduction in expected loan and overall balance sheet growth through 2024. Despite this, the analysts see potential for increased net interest income (NII) due to better funding costs than previously anticipated. This outlook reflects a more optimistic view of the bank's ability to manage its funding in a cost-effective manner.
The new price target of $62 is based on approximately 12 times the firm's earnings estimate for 2025, which is an increase from the 11 times earnings previously used in their valuation model. This change underscores Piper Sandler's growing confidence in Hancock Whitney's forward estimates and its potential to deliver profitability that outperforms its peers.
In other recent news, Hancock Whitney's Q2 results showcased robust net interest income growth and well-controlled credit trends, leading Truist Securities to raise its shares target from $49.00 to $57.00. The company's pre-provision net revenue surpassed both Truist's and consensus estimates.
DA Davidson and Citi also raised their price targets for Hancock Whitney to $63.00 and $61.00 respectively, citing solid second-quarter results, net interest margin expansion, and profitability.
In contrast, Truist Securities and Stephens maintained their Hold and Equal Weight ratings respectively, expressing caution about the bank's potential for limited growth. Citi initiated a 90-day upside catalyst call on Hancock Whitney, signaling potential stock performance in the near term. These recent developments highlight Hancock Whitney's consistent funding costs, an increase in net interest income, and low credit costs.
In terms of capital strategy, Hancock Whitney's Common Equity Tier 1 (CET1) ratio currently stands at 13.2%, and projections suggest this could increase to over 14% by the end of 2025 if the current conservative pace of share repurchases continues.
The bank's 2024 guidance presented a steady year-over-year loan balance, with an anticipated increase in fee income and a slower rise in expenses supporting the pre-provision net revenue forecast.
InvestingPro Insights
Piper Sandler's upgraded price target for Hancock Whitney (NASDAQ:HWC) is supported by a notable surge in the stock's performance, with an impressive 12.77% return over the last week and an even more robust 19.82% return over the past month. These figures are a testament to the bank's momentum, which may interest investors seeking growth. Furthermore, an InvestingPro Tip points out that Hancock Whitney has maintained dividend payments for 37 consecutive years, a remarkable sign of its commitment to shareholder returns. This is complemented by a substantial dividend growth of 33.33% over the last twelve months as of Q1 2024, showcasing the bank's ability to increase shareholder value.
Additionally, the bank's P/E ratio stands at 12.53, which is closely aligned with the 12 times earnings estimate for 2025 used by Piper Sandler in their valuation model, reinforcing the firm's positive outlook. Investors should note that while the bank's revenue has seen a decline of 8.87% over the last twelve months as of Q1 2024, Hancock Whitney's strong return on assets of 1.03% and consistent dividend payments suggest a stable financial position.
For those interested in further insights, InvestingPro offers additional tips on Hancock Whitney, which can be accessed at https://www.investing.com/pro/HWC. Use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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