Recent mixed coverage on Huntington Bancshares (HBAN) reflects disagreement over how management’s longer term guidance lines up with pressure on net interest income, funding costs, and competition facing the regional bank.
At a share price of US$15.37, Huntington Bancshares has seen short term share price momentum fade, with the 30 day share price return down 8.29% and the 90 day share price return down 13.99%, even though the 3 year total shareholder return of 73.34% still paints a much stronger long run picture.
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For Huntington Bancshares, the recent pullback could be investors cooling on the story rather than a verdict on the underlying franchise. The question now is whether the current price fairly reflects that split view.
Most Popular Narrative: 20.7% Undervalued
Huntington Bancshares is currently trading at $15.37, compared with a most-followed fair value estimate of about $19.38 that applies a 7.36% discount rate. This frames the stock as meaningfully discounted in that narrative.
The expansion into Texas through the Veritex acquisition, together with the Cadence partnership and build-out in the Carolinas, is widening Huntington Bancshares’ footprint in higher population growth markets and is supported by sequential loan and deposit growth, which can underpin future revenue and earnings.
Value-added fee businesses at Huntington Bancshares, including payments, wealth management, capital markets and loan and deposit fees, are still growing faster than the balance sheet, with recent double digit growth in several of these areas, which can increase noninterest income and support net margins as funding costs stay elevated.
See why 49 investors see Huntington Bancshares as 21% undervalued.
Result: Fair Value of $19.38 (UNDERVALUED)
Still, higher funding costs and pressure on net interest income at Huntington Bancshares could blunt the fee growth story if deposit competition continues for a longer period.
Find out about the key risks to this Huntington Bancshares narrative.
Next Steps
Mixed signals rarely last long. If you think the Huntington Bancshares story is more balanced than the headline numbers suggest, move quickly, study the full picture of potential trade offs, and weigh the 5 key rewards and 1 important warning sign.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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