Analyst Ebrahim Poonawala from Bank of America Securities reiterated a Buy rating on Huntington Bancshares and increased the price target to $20.00 from $19.00.
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Ebrahim Poonawala has given his Buy rating due to a combination of factors that highlight Huntington Bancshares’ growth potential and strong management. The meetings with CEO Steve Steinour and CFO Zach Wasserman revealed that the bank’s growth prospects are not fully appreciated in its current stock valuation, as it trades at a multiple similar to its peers despite having superior growth potential. The bank’s strategic investments in the Southeast US and focus on increasing fee revenue are expected to drive this growth.
Additionally, two key drivers could lead to a re-rating of the stock. First, if Huntington can demonstrate consistent revenue growth that surpasses its peers, it could act as a catalyst for a higher valuation. Second, a rise in investor interest in regional banks could lead to a better recognition of Huntington’s unique growth opportunities. The management’s disciplined approach to expense management and strategic acquisitions, such as the Veritex deal, further supports the positive outlook, prompting the reiteration of the Buy rating.